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Author: 


Parkhurst,  Frederic 
Augustus 

Title: 

The  science  of 
management 

Place: 

[Cleveland] 

Date: 

[1918] 


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Parkhurst,  Frederic  Augustus,  1877- 

The  scionco  of  management,  by  Frederic  A.  Parkhurst 
. . .    (Cleveland,  Printed  by  the  Exline  co.,  ^1918] 

ix,  203  p.    23i" 


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THE 


SCIENCE  OF  MANAGEMENT 


BY 

FREDERIC  A.  PARKHURST,  M.  E. 

Organizing  Engineer 


i 


A  Course  of  Lectures  Given  at 

Case  School  of  Applied  Science 
cleveland,  ohio 

1917-1918 


) 


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T*^ 


F 


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Copyright,  1918 

BY 

FREDERIC  A.  PARKHURST 


A 


T^X^i. 


PREFACE 


The  author  feels  that  best  results  can  be  obtained  from  a 
course  of  lectures  when  the  student  has  the  advantage  of  a 
printed  text  to  which  he  can  refer  as  occasion  requires 
This  book  has  been  prepared  to  give  such  an  advantage  to 
the  students  of  Case  School  of  Applied  Science,  191 7-18, 
who  are  attending  the  course  upon  "The  Science  of  Man- 
agement." It  contains  the  necessary  chapters  from  the 
various  books  on  the  allied  integral  parts  of  the  subject 
and  with  "Applied  Methods  of  Scientific  Management,"  re- 
quired for  the  course,  completes  the  text  for  the  entire 

thirty  lectures. 

The  Author. 


T 


111 


TABLE  OF  CONTENTS 


LECTURE  I  PAGE 

History    ^ 

1-A.  History  of  the  Science  of  Management 2 

1-B.  Bibliography     10 

LECTURE  II 

Fundamentals;  Practice  vs.  Theory  in  the  Science  of  Management  21 

LECTURE  III 

Fundamentals ;  Practice  vs.  Theory  in  the  Science  of  Management 

(Continued)    32 

LECTURE  IV 

"Put  Your  House  in  Order" 42 

A  Discussion  of  the  Responsibilities  of  both  the  Owner  and 

the  Engineer  42 

LECTURE  V 

First  Essentials  (Chapter  I  of  text) 53 

1-A.  Preliminary  Investigation 53 

1-  B .  The  Form  of  Organization 53 

1-C.  The  Organization   Record S3 

LECTURE  VI 

Departmental  Functions  (Chapter  II  of  text) 54 

2- A.  Functions  of  the  Sales  Department  and  Counting  Room  54 

2-B.  Functions  of  the  Engineering  Room 54 

2-  C .  Functions  of  the  Drafting  Room 54 

LECTURE  VII 

Drafting  Room  Methods  (Appendix  of  text) 55 

VII.  Drafting  Room  Instructions  (Page  215) 55 

VIII.  Instructions   for  Drawing  and   Sketch  Indexes    (Page 

223)    55 

XXXI.  Shop  and  Drawing  Boys'  Instruction  (Page  296) 55 

V 


LECTURE  VIII 

PAGE 

Planning  Room  (Part  of  Chapter  III  of  text)   56 

3- A .  Planning  Department 56 

3-B.  Duties  of  the  Superintendent 56 

3-C.  Functions  of  the  Planning  Department 56 

3-D.  The  Production  Clerk   56 

LECTURE  IX 

Planning  Room  Instructions  (Appendix  of  text) 57 

X.  Production  Clerk's  Instructions    (Page  231) 57 

XL  Planning  Department  Monthly  Report  (Page  233) 57 

LECTURE  X 

Planning  Room,  Continued  (Part  of  Chapter  III  of  text) 58 

3-  E .  The  Shop  Engineer   58 

3-F.  The  Stores  Clerk   58 

3-G.  The  Cost  Clerk  •* 58 

3-H.  The  Route   Clerk    58 

3-  I .  The  Order-of-Work  Clerk   58 

3-J.  The  Shipping  Clerk  58 

3-K.  The  Receiving  Clerk  58 

3-L.  The  Time  Clerk   58 

3-M.  The  Schedule  Clerk 58 

LECTURE  XI 

Planning  Room,  Continued  (Part  of  Chapter  III  of  text) 59 

3-N.  The  Factory    Mail    System 59 

3-0.  The  Time  Boy  59 

3-  P .  The  Inspector 59 

3-Q.  The  Stores  Keeper  59 

3-R.  The  Move   Material   Boss 59 

XXXL  Inspectors  Instructions   (Appendix,  page  281) 59 

LECTURE  XII 

Routing  and  Control  of  Work  (Part  of  Chapter  IV  of  text) 60 

4-A.  The  Routing  of  Work  Through  the  Shops 60 

4-B.  Symbols    (For    further   reference    see   "Symbols'*   pub- 
lished by  the  author  in  early  1917) 60 

LECTURE  XIII 

Routing  and  Control  of  Work,  Continued   (Part  of  Chapter  IV 

of   text)    61 

4-C.  The  Functions  of  the  Material  Boss 61 

4-D.  The  Functions  of  the  Order-of-Work  Clerk 61 

4-E.  Gang  Bosses  61 

4-  F.  The  Speed  Boss   61 

vi 


] 


LECTURE  XIV 

PAGE 

Routing   and   Control   of   Work,   Continued    (Part   of   Appendix 

of  text)   62 

XIV.  Anticipating  Requirements  both  as  to  Rough  Material, 

Machining  Operations  and  Assembly  (Page  243) 62 

XV.  Order-of-Work  Clerk's   Instructions    (Page  246) 62 

XVI.  Movement  of  Batches  in  Installments  (Page  249) 62 

XVII.  Route  Rack  Signals   (Page  249) 62 

LECTURE  XV 

\    Stores,  Labor  and  Cost  (Part  of  Chapter  V  of  text) 63 

Note :    The  student  is  referred  to  the  author's  "Predetermina- 
tion of   Prices"   for  a  further  insight  into  the  controlling 
elements  necessary  in  connection  with  costing. 
5- A.  The  Creation  of  a  Stores  Department,  the  Methods  of 
Classifying    and    Housing    all    Material    (Rough    or 
Finished)   not  in   Process  of  Manufacture,   and  the 
Ordering  of  Stores  either  to  be  Purchased  Elsewhere 
or  to  be  made  in  the  Shops 63 

5-B.  The  Perpetual  Inventory  or  Stores  Ledger,  Showing 
how  it  is  Kept  up  to  Date  and  Checked  to  Always 
Agree  with  the  Actual  Stock 63 

LECTURE  XVI 

Stores,  Labor  and  Cost,  Continued  (Part  of  Chapter  V  of  text).       64 
5-C.  The  Means  used  to  get  Correct  Returns  for  all  Times 
Expended  on  Work,  whether  as  Expense  or  as  Pro- 
ductive Labor,  including  Operation  Times 64 

5-D.  The  Combined  Cost  and  Route  Sheet,  and  the  Methods 
Employed  to  Distribute  and  Collate  all  Material  and 
Labor  Charges  as  well  as  Overhead  Expense 64 

LECTURE  XVII 

Indirect    Costs    (Reprinted    from    Chapter    IV    of    the    author's 

"Predetermination   of    Prices")    65 

4-A.  Expense  Symbols   65 

4-  B .  Expense    Distribution    68 

4-  C .  Distribution  of   Burden    68 

4-D.  Erroneous  Methods  of  Distribution 77 

4-E.  Differential  Process  Rate  Method 84 

4-F.  Undistributed  Burden   92 

LECTURE  XVIII 

Estimating    (Reprinted  from   Chapter  VI  of  the  author's  "Pre- 
determination of  Prices")    93 

6-A.  Machine   Shop    94 

6-  B .  Foundry    '• 97 

•  • 

vn 


li 


LECTURE  XIX 

PAGE 

Profit    and    Relatively    True    Selling    Prices     (Reprinted    from 
Chapters  VII  and  VIII  of  the  author's  "Predetermination 

of  Prices")  108 

7-A.  Per  Productive  Hours   109 

7-B.  Per  Pound    110 

7-C.  Per  Piece    HI 

7-D.  Per  Cent  of  Cost Ill 

7-E.  Mutual  Satisfaction   112 

VIII.  Conclusion    115 

LECTURE  XX 

The  Tool  Room  (Part  of  Chapter  VI  and  Appendix  of  text) 117 

6- A.  The  Standardization  of  Methods  and  Tools 117 

XXVIII.  Instruction  for  Tool  Foremen  (Page  287) 117 

XXIX.  Instruction  as  to  Tool  Requirements   (Page  298) 117 

XXX.  Instruction  for  Care  and  Storage  of  Tools  (Page  295)  117 


LECTURE  XXI 

Manufacturing  and  Erecting  (Part  of  Chapter  VI  of  text) 118 

6-B.  The  Development  of  a  Manufacturing  System 118 

6-C.  The  Handling  of  Erection  Work 118 

LECTURE  XXII 

Time  Study  and  Bonus  (Part  of  Chapter  VII  of  text) 119 

7-A.  Introduction  of  Time  Studies 119 

7-B.  Analysis    of    Time    Studies    and    the    Development    of 

Instruction   Cards    119 


LECTURE  XXIII 

Time  Study  and  Bonus,  Continued  (Part  of  Chapter  VII  of  text)     120 

7-C.  Discussion  of  Piece  Work,  Premium,  Bonus,  Differen- 
tial Rate  and  Differential  Bonus  Systems  of  Wage 
Payment   120 

7-D.  Method  used  by  the  Author  to  Compute  Differential 

Bonus    120 


LECTURE  XXIV 

Time  Study  and  Bonus,  Continued  (Reprinted  from  the  author's 

"Scientific  Management  in  the  Foundry,"  Sections  9  and  10)     121 
9.  The  Control  of  Methods  and  Labor  through  Time  Studies 

and  Sub-Operation  Times   121 

10.  Time  Study  Foreman  122 


Vlll 


i|  f 


LECTURE  XXV 

PAGE 

Time  Study  and  Bonus,  Continued  (Reprinted  from  the  author's 
"Scientific  Management  in  the  Foundry,"  Sections  11  to 
15  inclusive)    ^^^ 

11.  Time  Study  Instructions  in  Detail 133 

12.  Standard  Elemental  Sub-Operation  Times  for  Floor  Work    139 

13.  Standard  Sub-Elemental  Operation  Times  for  Bench  and 

Squeezer  Work   144 

14.  Standard  Miscellaneous   Data   149 

15.  General  Instructions  to  Time  Study  Men 151 


LECrrURE  XXVI 

Time  Study  and  Bonus,  Continued  (Reprinted  from  the  author's 

"Scientific  Management  in  the  Foundry,"  Section  16) 152 

16.  Parkhurst's  Differential  Bonus  152 

LECTURE  XXVII 

Departmental  and  Plant  Efficiency  Bonus  (from  the  manuscript 
of   the   author's   "Scientific   Time    Study   and    Differential 

Bonus")     165 

27- A .  Departmental    Efficiency    Bonus 165 

27-B.  Plant  Efficiency  Bonus  180 

LECTURE  XXVIII 
Departmental  and  Plant  Efficiency  Records  182 

LECTURE  XXIX 

Inspection  (Reprinted  from  the  author's  **Scientific  Management 

in  the  Foundry,"   Section   17) 188 

17.  Details  of  Inspection • 188 

LECTURE  XXX 

Results  Obtained  Through  the  Correct  Application  of  the  Science 
of  Management  (from  the  manuscript  of  the  author's 
"Scientific  Time  Study  and  Differential  Bonus") 198 

30- A.  Effect  on  Production  and  Quality 198 

30-B.  Effect  on  Costs  200 

30-  C .  Individual  and  Corporate  Effect 201 


NOTE — Some  of  the  lectures  will  be  illustrated  thru  means 
of  lantern  slides,  particularly  those  lectures  reprinted  from  the 
author's  books  noted  above.  The  illustrations  referred  to  have 
been  omitted  ovring  to  the  fact  that  the  plates  vrere  not  available. 


IX 


tt 


THE   SCIENCE   OF   MANAGEMENT 


LECTURE  I 

1-A.    The   History  of  the   Science  of  Management. 

1-B.       BlBLKXJRAPHV. 

Before  taking  up  the  specific  subject-matter  of  Lecture  i, 
I  want  to  say  a  few  words  in  general  covering  a  word  on 
preparedness  and  the  important  place  which  the  Science  of 
Management  may  take  in  the  solution  of  some  of  our  Na- 
tional problems.  Some  of  our  best  men  believe  that  after 
the  conclusion  of  the  present  European  War,  we  are  going 
to  experience  in  the  next  ten  or  twenty  years  a  terrific 
struggle  between  Nations  for  supremacy  in  the  world's 
market.  Indications  are  that  Great  Britain  is  right  now 
looking  far  ahead  in  this  respect. 

From  information  which  has  been  obtained  from  men 
who  have  been  abroad  within  the  last  few  months,  we  are 
impressed  with  the  difference  between  the  attitude  of  the 
English  manufacturers  and  that  of  the  French  and  Italians. 
The  English  shops  are  closed  tight.  The  general  attitude 
in  regard  to  information  tends  to  make  us  believe  that  Eng- 
land is  going  to  be  a  big  factor  in  the  domination  of  the 
world's  market.  The  only  way  the  United  States  can  hold 
or  improve  her  position  in  this  respect  is  by  maximum  con- 
centration, a  broad  policy,  and  the  development  of  efficiency 
to  its  highest  possible  state.     This  means  organization. 

The  English  and  French,  particularly,  have  undergone  a 
tremendous  awakening  in  regard  to  possibilities  of  increased 
production  and  hence  decreased  cost  through  more  efficient 
operation.  The  demands  of  the  war  have  of  course  forced 
this  as  a  self-preservative  necessity.  Both  these  Nations 
have  put  forth  efforts  which  they  never  before  dreamed  of. 
The  vast  quantity  of  munitions  required  has  helped  to  im- 
press on  them  the  advantages  to  be  gained  by  manufactur- 
ing on  a  big  scale  and  properly  rigging  up  to  do  their  work. 


vJ^ 


2  HISTORY 

American  manufacturers  have  led  the  world  from  a  pro- 
duction standpoint.  More  or  less  efficient  methods  have 
tended  to  fit  us  for  wonderful  development  along  this  line. 
We  must  not  think  for  a  moment,  however,  that  we  can  lay 
on  our  oars.  Our  best  efforts  are  going  to  be  required  after 
the  war  to  successfully  compete  in  the  world  markets,  par- 
ticularly as  our  merchant  marine  has  heretofore  been  almost 
a  negligible  factor.  With  Britain  controlling  the  seas  from 
a  commerce  standpoint,  our  problem  becomes  all  the  greater. 

In  the  last  five  years,  the  manufacturers  in  America  have 
in  general  begun  to  appreciate  the  possibiHties  of  Scientific 
Management.  It  is  not  many  years  ago  that  Taylor's 
methods  were  laughed  at  and  it  has  only  been  recently  that 
results  obtained  in  a  good  many  different  plants  involving 
a  total  of  eighty  odd  industries,  have  awakened  the  Ameri- 
can business  man  to  the  possibilities  that  lie  before  him  if 
he  will  only  become  efficient. 

I  have  defined  Scientific  Management  as  follows: 

The  Science  of  Management  is  the  conservation 
of  material,  labor  and  resources,  founded  on 
research  and  exact  data. 

America's  place  in  the  world  market  will  depend  on  her 
organization  and  efficiency. 

1-A.     The  History  of  the  Science  of  Management. 

Dr.  Frederick  Winslow  Taylor  was  the  founder  of  what 
is  today  known  as  Scientific  Management.  Dr.  Taylor  was 
born   in   Germantown,   Pa.,   in    1856  and   died   March   21, 

1915- 

Dr.  Taylor's  primary  education  was  obtained  in  the 
United  States,  France  and  Germany.  He  prepared  at  Exe- 
ter Academy  for  Harvard,  class  of  1874,  at  the  age  of 
eighteen  years.  At  this  time  his  eyesight  gave  him  a  great 
deal  of  trouble  and  prevented  his  taking  up  his  course  at 
Harvard,  and  he  had  to  entirely  change  his  educational 
plans. 


I 


FREDERIC  A.    PARKHURST  3 

Dr.  Taylor  came  home  and  secured  an  apprenticeship  at 
a  small  pump  works  in  Philadelphia.  He  completed  this 
apprenticeship  in  1878  and  took  a  job  as  laborer  in  the  Mid- 
vale  Steel  Works,  where  he  remained  until  1890.  While 
at  the  Midvale  Steel  Works,  after  working  a  time  as  la- 
borer, he  obtained  a  position  as  shop  clerk  and  then  was 
promoted  to  take  charge  of  the  tool  room. 

It  was  in  connection  with  his  work  in  the  tool  room  that 
Mr.  Taylor  first  saw  and  began  to  study  the  inefficiency  of 
the  methods  then  in  use  whereby  workmen  were  allowed  to 
do  their  own  tool  grinding.  He  noticed  that  every  man 
had  his  own  idea  as  to  how  a  tool  should  be  ground  and 
no  two  men  ground  their  tools  exactly  alike.  In  fact  it 
was  doubtful  if  any  one  man  repeatedly  ground  the  same 
size  and  type  of  tool  exactly  alike. 

Based  on  his  study  of  what  he  thought  was  needed  in  the 
way  of  tool  grinding,  Mr.  Taylor  invented  the  Taylor 
grinder,  which  grinder  was  put  on  the  market  and  used 
somewhat  extensively  foi  all  standard  shape  lathe,  planer 
and  similar  tools.  Similar  grinders  have  been  put  on  the 
market  for  the  same  purpose. 

Six  years  after  Mr.  Taylor  entered  the  employ  of  the 
Midvale  Steel  Company  as  a  laborer,  he  became  Qhief  En- 
gineer of  that  Company,  having  in  the  meantime  filled 
various  positions  including  foreman,  Superintendent,  etc. 

In  1880  Mr.  Taylor  took  up  a  course  of  night  study  then 
required  by  the  Stevens  Institute  and  in  1883  obtained  from 
Stevens  Institute  the  degree  of  M.  E.  Mr.  Taylor  remained 
with  the  Midvale  Steel  Company  until  1890.  During-  this 
time  he  made  a  very  exhaustive  study  of  shop  methods  and 
with  the  co-operation  of  Mr.  Wm.  Sellers,  was  able  to  put 
these  methods  into  effect  in  the  Midvale  Steel  Company  and 
greatly  improve  shop  production.  This  production  was  in- 
creased 200  to  300%. 

In  connection  with  the  study  of  shop  operations,  Mr. 
Taylor  immediately  saw  that  it  was  necessary  to  get  the 
co-operation  of  the  workmen  and  pay  them  additional  com- 


HISTORY 


pensation  for  the  extra  work  turned  out.  This  compensa- 
tion varied  from  25%  to  100%,  depending  on  the  class  of 
work  involved.  It  was  at  the  Midvale  Steel  Co.  that  Mr. 
Taylor  formed  the  foundation  for  his  life's  work  in  the 
management  field. 

In  the  years  1890  to  1893,  Mr.  Taylor  was  associated 
with  a  Company  operating  paper  mills  in  the  State  of 
Maine.  From  1894  to  1898  he  devoted  his  time  to  con- 
sulting work. 

In  1898  Mr.  Taylor  was  employed  by  the  Bethlehem 
Steel  Company  to  help  them  in  an  analysis  of  their  machine 
shop  problems  and  to  help  work  out  some  solution  to  their 
difficulties  whereby  their  production  could  be  increased. 
The  Bethlehem  Steel  Company  had  at  that  time  just  com- 
pleted a  large  addition  to  their  forge  shop  and  it  was  the 
consensus  of  opinion  that  an  expenditure  of  about  one  mil- 
lion dollars  for  additional  machine  shop  capacity  would  be 
needed  for  the  additional  increased  forge  shop  capacity. 

In  connection  with  Mr.  Taylor's  investigation  of  the 
Bethlehem  Steel  Company's  problem,  he  immediately  saw 
the  necessity  for  doing  something  to  increase  the  productive 
capacity  of  the  machines.  He  saw  that  a  very  superior  tool 
steel  was  needed  to  enable  the  machines  to  get  out  the  work 
which  they  were  capable  of. 

In  association  with  a  Metallurgist,  Mr.  Maunsel  White, 
a  series  of  experiments  and  investigations  were  conducted 
which  resulted  in  the  discovery  of  the  Taylor- White  process 
for  making  high  speed  tool  steel.  This  process  resulted  in 
increasing  the  efficiency  of  tool  steel  from  100  to  200%. 

The  essential  qualities  of  all  high  speed  steels  are  those 
which  were  first  made  by  Messrs.  Taylor  and  White.  The 
new  steels  revolutionized  machine  shop  practice  and  also 
revolutionized  the  machine  tool  industry.  As  a  result  of 
these  studies  and  the  production  of  a  high  capacity  steel,  the 
production  at  the  Bethlehem  Steel  Company's  machine  shop 
was  increased  500 7r.     Instead  of  building  a  large  addition 


^  f 


FREDERIC  A.   PARKHURST  5 

to  their  machine  shop,  a  large  addition  to  the  forge  shop 
was  needed  instead. 

In  1903,  Mr.  Taylor  published  his  "Shop  Management." 
"The  Art  of  Cutting  Metals"  was  published  in  1906  and 
constituted  Mr.  Taylor's  presidential  address  to  the  Ameri- 
can Society  of  Mechanical  Engineers.  This  work  has  been 
considered  a  classic  and  will  be  found  complete  in  the  A. 
S.  M.  E.  Transactions  of  1907.  Volume  28.  "The  Art  of 
Cutting  Metals"  covers  twenty-six  years  of  experiments  in 
connection  with  the  scientific  solution  of  this  phase  of  the 
management  problem. 

The  students  are  earnestly  requested  to  read  Taylor's 
"Art  of  Cutting  Metals,"  as  a  careful  perusal  of  this  work 
will  very  materially  help  them  to  understand  what  is  in- 
volved in  real  Scientific  Management.  It  wall  indicate  to 
them  the  untiring  energy,  the  deep  attention  to  the  problem 
and  the  necessity  for  the  highest  type  of  scientific  minds 
which  must  be  brought  to  bear  on  problems  of  this  kind. 

The  University  of  Pennsylvania  in  1906  conferred  on 
Mr.  Taylor  the  degree  of  Sc.  D. 

It  will  be  interesting  to  review  briefly  some  of  Dr.  Tay- 
lor's work  in  connection  with  the  machine  shop  problem. 
The  first  questions  involved  were: 

(a)  What  tool  shall  I  use? 

(b)  What  cutting  speed  shall  I  use? 

(c)  What  feed  shall  I  use? 

In  trying  to  determine  the  answers  to  the  above  questions, 
many  elements  were  involved  with  the  result  that  before 
these  questions  could  be  answered,  the  effect  of  at  least 
twelve  variables  must  be  definitely  controlled.  These  twelve 
variables  are : 

(a)  The  quality  of  the  metal  wtlich  is  to  be  cut. 

(b)  The  diameter  of  the  work. 
(c)/The  depth  of  cut. 

fa)  The  thickness  of  the  shaving.   . 


..'::^---^J8l!i!PBP 


■miBirr- 


O  HISTORY 

(e)  The  elasticity  of  the  work  and  of  the  tool. 

(f)  The  shape  or  contour  of  the  cutting  edge  of 
the  tool,  together  with  its  clearance  and  slip 
angles. 

(g)  The  chemical  composition  of  the  steel  from 
which  the  tool  is  made  and  the  heat  treatment 
of  the  tool. 

(h)  Whether  a  copious  stream  of  water  or  other 
medium  is  used  on  the  tool. 

(i)  The  duration  of  the  cut ;  take  notice  i.  e.  the 
time  which  a  tool  must  last  under  pressure  of 
the  shaving  without  being  re-ground. 

(j)   The  pressure  of  the  job  shaving  upon  the  tool. 

(k)  The  changes  of  speed  and  feed  possible  in  the 
lathe. 

(I)   The  pulling  and  feeding  power  of  the  lathe. 

In  discussing  this  work  and  further  quoting  from  *'The 
Art  of  Gutting  Metals,"  Dr.  Taylor  divides  the  problem 
into  four  chief  sections;  namely — 

A.  Laws  connected  with  the  art  of  cutting  metals. 

B.  The  mathematical  expression  of  these  laws. 

C.  Limitations    and    possibilities    of    metal    cutting 
machines. 

D.  Practical  application  of  knowledge  obtained  by 
means  of  slide  rules. 

In  connection  with  the  work  alK>ve  referred  to,  Mr.  Tay- 
lor had  associated  with  him,  Mr.  H.  L.  Gantt,  one  of  the 
best  scientific  managers,  and  Mr.  Carl  G.  Barth,  also  a 
noted  scientific  manager  and  one  of  our  greatest  mathema- 
ticians. Mr.  Barth  was  able  to  design  a  slide  rule  which 
could  be  readilv  modified  to  suit  each  different  machine  and 
on  which  he  was  able  to  bring  under  control  the  twelve 
variables  above  mentioned.  The  result  of  adapting  all  these 
mathematical  laws  to  the  slide  rule  made  it  i)ossible  for  any 
man  after  a  few  minutes  of  instruction  and  endowed  with 


M 


I 


% 


FREDERIC   A.    PARK  HURST  / 

only  a  very  ordinary  education,  to  quickly  solve  the  three 
questions  listed  above;  namely,  what  tool,  speed  and  feed 
should  be  used  for  a  given  piece  of  work. 

Too  much  emphasis  cannot  be  laid  on  the  importance  of 
not  considering  any  one  of  the  elements  of  Scientific  Man- 
agement as  of  paramount  importance,  or  of  parauiount 
necessity.  To  quote  Mr.  Taylor's  final  closing  remarks 
after  the  discussion  of  his  paper,  'The  Art  of  Cutting  Met- 
als," at  the  A.  S.  M.  E.  Convention  in  1906,  "In  conclusion, 
I  can  but  express  a  certain  surprise  and  regret  that  our 
paper  *On  the  Art  of  Cutting  Metals,'  has  attracted  so 
much  more  attention  than  has  been  given  to  our  various 
papers  on  shop  management,  which,  after  all,  is  the  real 
vital  subject  in  which  we  are  most  interested,  and  of  which 
the  art  of  cutting  metals  constitutes,  on  the  whole,  merely 
one  of  the  important  elements."  The  fact  remains  that  all 
of  the  elements  of  Scientific  Management  are  of  importance 
and  must  be  co-ordinated  before  the  final  completion  of  this 
scheme  of  management  and  before  the  full  effects  of  same 
can  be  realized  both  by  the  Company  and  the  Company's 
employees. 

In  the  course  of  lectures  to  be  given  this  year,  all  of  the 
various  elements  will  be  discussed  and  treated  as  completely 
as  the  time  will  permit,  so  as  to  make  clear  to  you  all,  the 
importance  of  the  organization  scheme  in  its  entirety  as 
opposed  to  the  random  installation  of  certain  elements. 

The  chief  elements  of  Scientific  Management  as  stated  by 
Dr.  Taylor  himself  are: 

A.  Science,  not  rule  of  thumb. 

B.  Harmony,  not  discord. 

C.  Co-operation,  not  individualism. 

D.  Maximum  output  in  place  of  restricted  output. 

E.  Development  of  each  man  to  his  greatest  ^^ 
ciency  and  prosperity. 

Each  of  these  elements  will  be  discussed  more  completely 
at  a  later  lecture. 


h'- 


8 


HISTORY 


In  connection  with  the  development  of  his  work.  Dr.  Tay- 
lor had  associated  with  him  among  others,  H.  L.  Gantt,  Carl 
G.  Barth  and  Sanford  E.  Thompson.  As  time  went  on,  he 
was  more  closely  associated  with  other  men  as  the  scope  of 
his  work  broadened  and  more  engineers  began  to  study  and 
follow  closely,  Taylor's  methods. 

Among  the  other  early  pioneers  of  this  work  may  be 
named  Gilbreth,  Dodge  &  Day,  Emerson  and  myself.  I  was 
fortunate  in  being  closely  associated  with  the  above  men  to 
the  extent  of  being  able  to  clearly  study  particularly  the 
work  of  Taylor,  Gantt  and  Barth.  I  was  in  position  to 
profit  by  their  mistakes  and  I  profited  by  criticisms  of  their 
methods  of  handling  this  kind  of  work.  Although  never 
directly  associated  with  any  of  them  except  Harrington 
Emerson,  with  whom  I  was  connected  when  he  started  his 
first  management  work,  I  have,  as  above  stated,  been  closely 
allied  with  their  methods.  I  have  been  able  to  develop  my 
own  methods  to  get  in  my  judgment,  the  best  results  by  the 
application  of  the  Taylor  principles. 

In  section  i-B  of  this  lecture  I  give  a  rather  complete 
bibliography  of  the  literature  on  the  subject.  This  litera- 
ture is  not  very  extensive  and  the  majority  of  the  books 
listed  treat  of  generalities  rather  than  all  phases  of  the 
Science  of  Management. 

The  leading  books  listed  in  the  bibliography  above  men- 
tioned can  be  read  to  advantage.  It  is  desirable  that  every 
student  cover  the  field  sufficiently  to  be  able  to  understand 
the  entire  subject  from  a  broad  viewpoint. 

There  are  statistics  from  about  one  hundred  thirteen 
(113)  plants  in  the  country  that  have  adopted  wholly  or 
in  part  the  principles  of  Scientific  Management.  These 
plants  represent  over  eighty  (80)  industries.  Of  the  num- 
ber above  mentioned,  fifty-nine  (59)  are  reported  as  being 
complete  successes,  twenty  (20)  as  partial  successes,  and 
thirty- four  (34)  failures.  There  are  twenty-eight  (28) 
cases  now^  in  process,  of  which  it  is  expected  that  twenty- 
two  (22)  will  be  wholly  successful. 


i 


FREDERIC   A.    PARKHURST  Q 

Failures  are  due  chiefly  to  two  causes :  ( i )  The  inability 
of  the  so-called  expert  to  successfully  handle  the  proposi- 
tion; (2)  Faulty  management.  The  responsibility  for  the 
failures  is  practically  equally  divided  between  the  expert 
and  the  management.  Incompetency  on  the  part  of  the 
management,  dissension,  and  in  one  or  two  cases,  unfavor- 
able conditions  of  business  are  responsible  for  the  manage- 
ment failures. 

With  one  possible  exception,  there  have  been  no  failures 
due  to  difficulty  with  w'orkmen.  The  only  exception  that 
might  be  mentioned  is  the  case  of  the  Watertown  Arsenal, 
but  this  was  due  more  to  the  fault  of  the  local  management 
than  on  account  of  the  methods  being  installed.  In  this 
case  the  labor  difficulty  was  only  of  short  duration,  and 
Gen.  Crozier  shows  conclusively  the  great  saving  and  ad- 
vantages that  accrued  as  the  result  of  the  installation  of 
the  Taylor  system  of  management. 

Any  installation  that  is  self-sustaining  and  continues  to 
run  efficiently  long  after  the  engineer  has  left  the  work, 
may  be  considered  as  being  a  wholly  successful  proposition. 
A  great  many  of  the  companies  prefer  to  have  the  engineer 
retained  on  a  part  time  basis  so  as  to  supervise  at  intervals 
the  current  work  of  the  organization.  This  is  a  most  de- 
sirable way  of  handling  an  installation  of  this  kind. 

Unfortunately,  a  good  many  accountants  or  so-called  sys- 
tematizers  have  attempted  to  put  in  forms  and  give  the 
name  ''Scientific  Management"  to  ordinary  routine  installa- 
tion pertaining  chiefly  to  records.  Scientific  Management, 
as  I  will  show  during  the  ensuing  lectures,  is  a  rather  com- 
l)lex  and  scientifically  worked  out  scheme  of  operation  and 
control  which  varies  to  some  extent  in  detail  with  each  dif- 
ferent installation.  Scientific  analysis  and  research  must  be 
the  basis  of  every  installation,  some  of  the  research  being 
of  a  most  extensive  and  thorough  order. 

There  are  elements  involved  in  every-day  operation  of  the 
manufacturing  industries  which  the  layman  rarely  stops  to 


H: 


lO 


HISTORY 


consider.  In  a  very  large  percentage  of  cases  these  elements 
are  not  by  any  means  under  control  nor  has  there  been  any 
great  attempt  made  to  bring  them  under  control.  It  is  the 
object  of  Scientific  Management,  as  I  have  briefly  indicated 
above,  to  analyze  the  various  problems  into  their  elements 
and  bring  these  elements  under  control,  all  based  on  scien- 
tific investigation  and  fact. 

The  remaining  lectures  of  this  course  will  treat  on  the 
subject  as  completely  as  the  time  allotted  will  permit.  The 
lectures  cover  the  entire  field,  however,  to  such  an  extent 
that  the  student  will  be  able  to  have  a  rather  complete  idea 
by  the  end  of  the  year  as  to  just  what  is  involved.  He  will 
be  well  fitted  to  take  up  further  study  of  this  subject,  or 
to  co-operate  with  any  organization  of  the  type  under  con- 
sideration. 

The  psychological  element  is  of  great  importance,  as  in 
connection  with  the  management  problem  we  have  to  handle 
the  great  human  variable.  Psychology  is  one  of  the  big  con- 
trolling factors. 

1-B.     Bibliography. 

This    bibliography    is    quoted    almost    entirely    from    "The    Taylor    System    of 
Scientific    Management"   by    C.    Bertrand   Thompson,    1917. 

The  Taylor  and  Other  Systems  of  Shop  Management. 

Hearings  before  Special  Committee  of  the  House  of 
Representatives  to  investigate.  Washington,  Govern- 
ment Printing  Ofiice,  1912.  1-801,  803-1264,  1265- 
1935-    Free. 

Testimony  of  "Taylor  System"  and  other  man- 
agement engineers,  labor  leaders,  workmen  and 
War  Department  officials,  regarding  the  meaning 
and  actual  operation  of  the  Taylor  system.  One 
of  the  best  sources. 


FREDERIC   A.    PARKHURST 


II 


-^ 


^> 


Brandeis,  Louis  Dembitz 

Scientific  Management  and  Railroads,  New  York,  En- 
gineering Magazine  Co.,  191 1,  vii,  1-92,  $1.00. 

A  severely  concise  and  logical  presentation  of 
principles,  backed  by  the  testimony  of  witnesses  in 
the  famous  Eastern  Rate  Case  hearings  before  the 
Interstate  Commerce  Commission  of  1910.  This 
testimony  and  Mr.  Brandeis'  argument  made 
scientific  management  famous. 

Child,  Georgie  Boynton 

The  Efficient  Kitchen,  New  York,  McBride,  Nast  Co., 
1914,  xiii,  1-242,  $1.25. 

Based  on  work  of  the  Housekeeping  Experiment 
Station.  Stamford.  Conn.  Excellent  discussion 
of  methods  and  equipment.  Hard  reading  but 
practical. 

Church,  Alexander  Hamilton 

Science  and  Practice  of  Management,  New  York.  En- 
gineering Magazine  Co.,  1914,  xviii,  1-535.     $2.00. 

A  keen  analysis  and  synthesis  of  the  factors  in- 
volved in  industrial  management.  Somewhat 
critical  of  the  Taylor  system,  but  obviously  in- 
fluenced by  it.  A  substantial  contribution  to  the 
literature  of  scientific  management. 

Cooke,  Morris  Llewellyn 

Academic  and  Industrial  Efficiency,  New  York.  Car- 
negie Foundation  for  the  Advancement  of  Teaching, 
19 10.     Bulletin  Number  Five  vii,  2-134.     Free. 

A  highly  interesting  study  of  the  efficiency  of 
management  of  a  number  of  well-known  univer- 
sities and  colleges,  as  judged  from  the  point  of 
view  of  an  industrial  engineer.  Stimulated  a  wide 
discussion. 


\ 


12 


HISTORY 


m 


;, 


V.n 


Day,  Charles 

Industrial  Plants,  New  York,  Engineering  Magazine 
Co.,  191 1,  1-294.  Amplified  from  articles  appearing 
originally  in  the  Engineering  Magazine.     $3.00. 

An  illustration  of  the  application  of  some  of  the 
principles  of  scientific  management  to  the  design 
and  construction  of  industrial  plants.  Illustrated 
with  diagrams  and  photographs. 

Drury,  Horace  Brookwalter 

Scientific  Management,  a  History  and  Criticism.  New 
York,  Columbia  University,  1915,  7-222.    $175. 

A  doctoral  thesis,  especially  good  for  its  discussion 
of  the  origins  of  the  movement  and  its  relation  to 
the  problems  of  labor  and  wages.  Betrays  a  lack 
of  practical  acquaintance  with  current  methods 
and  status. 

Emerson,  Harrington 

Efiiciency,  New  York,  Engineering  Magazine  Co.,  ist 
ed.  1909,  4th  ed.  1914,  xii,  1-254.    $2.00. 

A  strikingly  written  exhortation  to  "efficiency,'* 
stimulating,  and  most  useful  when  it  leads  the 
reader  to  serious  study  of  the  authorities  on  the 
subject,  such  as  Taylor  and  Gantt. 

Emerson,  Harrington 

The  Twelve  Principles  of  Efficiency,  New  York,  En- 
gineering Magazine  Co.,  1912,  xviii,  1-423.    $2.00. 

An  interesting  and  popular  analysis  of  some  of 
the  more  obvious  principles  underlying  scientific 
management.  Well  written  and  suggestive  in  a 
general  way.  For  practical  application  of  prin- 
ciples see  Knoeppel,  "Installing  Efficiency  Meth- 
ods." 


FREDERIC   A.    PARKHURST 


13 


\ 


Evans,  Holder  A. 

Cost  Keeping  and  Scientific  Management,  New  York, 
McGraw-Hill  Book  Co.,  1911,  ix,  1-252.     $3.00. 

A  practical  machine  shop  treatise,  showing  the 
author's  methods  as  applied  at  the  Mare  Island 
Navy  Yard,  and  illustrating  what  may  be  done 
by  way  of  approach  to  the  Taylor  system  by  a 
competent  manager  without  the  aid  of  experts. 
Fairly  well  illustrated. 

Gantt,  Henry  Lawrence 

Work,   Wages  and   Profits,   New  York,   Engineering 
Magazine  Co.,  1910,  2nd  ed.  1913,  1-212.    $2.00. 

The  meat  of  the  author's  numerous  papers  and 
discussions  on  the  more  "human"  side  of  scien- 
tific management.  Illustrated  with  charts  and 
forms.    A  classic,  and  indispensable. 

Gilbreth,  Frank  Bunker 

Motion  Study,  New  York,  D.  Van  Nostrand  Co.,  191 1, 

xxiii,  1-116.     $2.00. 

A  meaty  study  of  the  variables  involved  in  the 
performance  of  manual  labor.  Illustrated  with 
photographs  and  tables  showing  the  author's  meth- 
ods and  results  in  the  bricklaying  trade. 

Gilbreth,  Frank  Bunker 

Primer  of  Scientific  Management,  New  York,  D.  Van 
Nostrand  Co.,  1912,  2nd  ed.  1914,  viii,  1-108.  $1.00. 
An  elementary,  popularly  written  catechetical 
presentation  of  the  fundamentals  of  scientific  man- 
agement. Explains  some  of  the  characteristic  de- 
tails of  the  Tavlor  svstem  and  discusses  certain 
current  criticisms. 

Kent,  William 

Investigating  an  Industry,  New  York,  John  Wiley  & 

Sons,  Inc.,  1914,  xi,  1-26.    $1.00. 

A  highly  suggestive  diagnosis  of  a  hypothetical 
plant,  with  special  attention  to  the  departments  of 
sales  and  financing  usually  neglected  in  works  on 
scientific  management.    Foreword  by  H.  L.  Gantt. 


14 


HISTORY 


Knoeppel,  Charles  Edward 

Installing  Efficiency  Methods,  New  York,  Engineering 
Magazine  Co.,  191 5,  viii,  1-258.     $3.00. 

The  best  presentation  of  the  Emerson  system  in 
its  best  form.  Interesting  and  stimulating.  Fully 
illustrated  with  forms,  charts,  photographs  and 
detailed  instructions. 


Parkhurst,  Frederic  Augustus 

Applied  Methods  of  Scientific  Management,  New 
York,  John  Wiley  &  Sons,  191 2,  xii,  1-325,  2nd  ed. 
1917.  1-337-    $2.00. 

A  detailed  description  of  the  methods  of  the  Fer- 
racute  Machine  Company,  including  the  "standing 
orders"  for  the  performance  of  various  functions, 
and  many  forms  and  photographs.  Is  a  close  ap- 
proximation to  the  Taylor  system  as  now  prac- 
ticed by  its  leading  exponents. 


Parkhurst,  Frederic  Augustus 

Scientific  Management  in  the  Foundry,  1-133.  Read 
before  the  American  Institute  of  Metals,  Chicago  Meet- 
ing, Sept.,  19 1 4,  and  Published  complete  in  Transac- 
tions of  American  Foundrymen's  Association,  Vol. 
XXIII. 

A  detailed  description  in  condensed  form  of  the 
application  of  the  author's  methods  of  scientific 
management  throughout  the  eight  plants  of  The 
Aluminum  Castings  Co.,  which  plants  involve  not 
only  the  sand  molding  trades  for  aluminum  and 
brass,  but  highly  technically  developed  melting 
practices  and  technical  control  of  metals,  large 
brass  finishing  shop  doing  the  highest  class  of  fin- 
ished work  in  both  brass  and  aluminum,  and  the 
operation  of  two  secret  process  plants. 


FREDERIC  A.   PARKHURST 


15 


I 


Parkhurst^  Frederic  Augustus 

Predetermination  of  Prices,  New  York,  John  Wiley  & 

Sons,  1916,  viii,  1-96.    $1.25. 

A  discussion  of  a  rather  advanced  practice  in  con- 
nection with  the  co-relation  of  costs  and  the  pre- 
sentation of  vital  facts  in  condensed  form  includ- 
ing a  description  of  a  scientific  method  of  deter- 
mining burden  rates  and  the  distribution  of  gen- 
eral expense  as  applied  in  connection  with  the 
author's  methods. 

Parkhurst,  Frederic  Augustus 

Symbols,  New  York,  John  Wiley  &  Sons,   191 7,  vi, 

1-165.     $2.00. 

A  discussion  of  the  symbol  system.  This  book 
includes  a  rather  complete  detailed  list  of  the  dif- 
ferent group  symbols  that  have  been  standardized 
to  date,  which  standardization  can  in  general  be 
quite  universally  adopted.  Probably  the  only  book 
devoted  entirely  to  symbols. 

Parkhurst,  Frederic  Augustus 

Scientific  Time  Study  and  Differential  Bonus.     About 

450  pages,  in  course  of  preparation. 

This  book  will  contain  about  25  chapters  and  will 
discuss  the  various  standardizations  that  have 
been  developed  by  the  author  in  connection  with 
standard  elemental  operation  times  as  well  as  a 
general  time  study  work.  The  charts  and  dia- 
grams show  performance  in  a  wide  range  of  in- 
dustries employing  representative  trades  through- 
out, with  detailed  instructions  as  to  time  study 
data,  etc.  Various  systems  of  wage  payments  will 
be  discussed  and  will  include  all  of  the  author's 
job  classifications,  bonus  classes,  and  a  wide  range 
of  application  of  his  differential  bonus  to  direct 
and  indirect  labor,  departmental  and  plant  eflfi- 
ciencies,  the  application  of  bonus  to  clerical  opera- 
tions, technical  work,  etc.     The  last  chapter  will 


i6 


HISTORY 


FREDERIC  A.    PARKHURST 


17 


include  a  statement  as  to  the  individual  and  cor- 
porate results  obtained  through  the  author's  meth- 
ods of  scientific  management. 

Pattison,  Mary 

Principles  of  Domestic  Engineering,  New  York,  191 5, 
1-3 10.     $2.00. 

Experiments  at  Colonia,  for  N.  J.  Women^s  Clubs. 

Deals  not  so  much  with  details  of  methods  and 

equipment  as  with  fundamental  principles  of  home 

building  and  management. 

Shaw,  A.  W.,  Company 

In  magazines  (System  and  Factory)  and  works 
(including  The  Library  of  Factory  Management) 
published  by  this  house  there  has  appeared  from 
time  to  time  material  having  to  do  with  the  Taylor 
system  of  scientific  management.  This  is  also  true 
of  other  periodicals  and  sets  not  mentioned  here, 
but  in  most  cases  taken  into  consideration  in  pre- 
paring Scientific  Management   (see  below). 

Taylor,  Frederick  Winslow 

On  the  Art  of  Cutting  Metals,  New  York  American 
Society  of  Mechanical  Engineers,  1907,  3-248,  and 
folders  1-24.     $3.50. 

One  of  the  most  notable  contributions  to  practical 
science.  Illustrates  by  example  the  fundamental 
methods  and  aims  of  scientific  management. 
Preface  reproduced  in  C.  B.  Thompson's  Scientific 
Management. 

Taylor,  Frederick  Winslow 

The  Principles  of  Scientific  Management,  New  York, 
Harper  &  Bros.,  191 1,  5-144.  Also  published  by  Amer- 
ican Society  of  Mechanical  Engineers.     $1.50. 

A  popular  restatement  of  the  principles  as  matured 
by  the  author  after  retirement  from  active  prac- 
tice. More  readable  than  **Shop  Management" 
and  equally  authoritative,  though  in  a  more  gen- 
eral way. 


Taylor,  Frederick  Winslow 

Shop  Management,  New  York,  Harper  &  Bros.,  19 11, 
5-203.  Foreword  by  Henry  R.  Towne.  Also  in  Trans- 
actions American  Society  of  Mechanical  Engineers, 
No.  1003,  New  York,  1903,  $1.50. 

The  fundamental  classic  of  Scientific  Manage- 
ment. Incorporates  the  best  of  the  author's  for- 
mer writings  and  experience,  and  is  the  basis  of 
the  later  developments.     Indispensable. 

Taylor,  Frederick  Winslow,  and  Thompson,  Sanford 
Eleazar 

Concrete  Costs,  New  York,  John  Wiley  &  Sons,  19 12, 
xii,  1-709.    $5.00. 

Illustrates  in  detail  the  application  of  the  time- 
studv  and  standardization  methods  of  scientific 
management  to  concrete  structural  work.  Illus- 
trated fully  with  charts,  sketches,  tables  of  ele- 
mentary times,  etc. 

Thompson,  Clarence  Bertrand 

Scientific  Management,  a  collection  of  the  more  sig- 
nificant articles  describing  the  Taylor  System  of  Man- 
agement, Cambridge,  Mass.,  Harvard  University 
Press,  1 914,  xii,  3-88,  $4.00. 

Includes  the  cream  of  the  literature  on  the  sub- 
ject (outside  of  the  standard  works  of  Taylor  and 
Gantt)  selected  and  edited  from  periodicals  and 
books,  many  of  which  are  now  out  of  print  or 
otherwise  difficult  of  access.  See  below  for  con- 
tents. 

CONTENTS  OF  SCIENTIFIC  MANAGEMENT 

(The  book  listed  just  above) 

Barth,  Carl  G. 

Slide  Rules  in  the  Machine  Shop  as  a  Part  of  the 
Taylor  System  of  Management. 


i8 


HISTORY 


Cardi  LLO,  Forest  E. 

Industrial  Administration  and  Scientific  Manage- 
ment. 

Carlton,  F.  Tracy 

Scientific  Management  and  the  Wage-Earner. 

Clark,  Sue  Ainslee  and  Wyatt,  Edith  Franklin 

Scientific   Management   as   Applied   to   Women's 
Work,  from  "Making  Both  Ends  Meet." 

Crozier,  Gen.  Wm. 

The  Taylor  System  of  Shop  Management  at  the 
\A^atertown  Arsenal. 

Cunningham,  Wm.  J. 

Scientific  Management  in  the  Operation  of  Rail- 
roads. 

Day,  Charles 

Management  Principles  and  the  Consulting  En- 
gineer. 

Dodge,  James  Ma  pes 

A  History  of  the  Introduction  of  a  System  of 
Shop  Management. 

The  Spirit  in  which  Scientific  Management  should 
be  approached. 

Gantt,  Henry  L. 

A  Graphical  Daily  Balance  in  Manufacture. 

Hathaway,  H.  K. 

Elementary  Time  Study  as  a  Part  of  the  Taylor 

System  of  Scientific  Management. 

The  Planning  Department,  Its  Organization  and 

Function. 

Prerequisites    to    the    Introduction    of    Scientific 
Management. 


FREDERIC   A.    PARKHURST 


19 


Kendall,  Henry  P. 

Unsystematized,      Systematized,     and     Scientific 
Management. 

Kent,  Robt.  Thurston 

The  Foreman's  Place  in  Scientific  Management. 
The  Tool  Room  under  Scientific  Management. 
Scientific  Management  as  viewed  from  the  Work- 
man's Standpoint. 

Kimball,  Dexter  S. 

Another  Side  of  Efficiency  Engineering. 

Le  Chatelier,  Henri 

Preface  to  the  French  Edition  of  "The  Principles 
of  Scientific  Management." 

Lewis,  Wilfred 

An  object  Lesson  in  Efficiency. 

Myers,  Lieut.  C.  J.,  U.  S.  N. 

The  Science  of  Management. 

Shaw,  Arch  Wilkinson 

Scientific  Management  in  Business. 

Smith,  Oberlin 

Nomenclature  of  Machine  Details 

Sterling,  Lieut.  Frank  W.,  U.  S.  N. 

The  Successful  Operation  of  a  System  of  Scien- 
tific Management. 

Stimpson,  H.  F. 

The  Application  of  Scientific  Management  to  a 
Railway  Shop. 

Sub-Committee  on  Administration  of  the  American 
Society  of  Mechanical  Engineers,  19 12 
The  present  State  of  the  Art  of  Industrial  Man- 
agement. 
The  Railways  and  Scientific  Management. 


\\ 


20 


HISTORY 


Anon — 


The  Mistakes  of  the  Efficiency  Men. 


Taylor,  Frederick  W. 

On  the  Art  of  Cutting  Metals  (Preface  and  Se- 
lections from  the  ensuing  discussion). 

A  Piece-Rate  System :  Being  a  Step  Toward  a 
Partial  Solution  of  the  Labor  Problem. 

Thompson,  C.  B. 

Bibliography  of  Scientific  Management. 

Qassification  and  Symbolization. 

The  Literature  of  Scientific  Management. 

The   Relation   of   Scientific   Management   to   the 

Wage  Problem. 

Scientific  Management  in  Retailing. 

Tuck  School  Conference 

Addresses  and  Discussions  at  the  Conference  on 
Scientific  Management.  Hanover,  N.  H.,  Amos 
Tuck  School,  191 2,  xi,  1-388.  $2.50.  Papers  by 
F.  W.  Taylor,  H.  L.  Gantt,  C.  H.  Jones.  H.  P. 
Kendall,  J.  M.  Dodge,  H.  Emerson  and  others, 
and  discussions  led  by  H.  K.  Hathaway,  E. 
Szepesi,  C.  H.  Jones,  M.  L.  Cooke,  E.  F.  Gay,  F. 
A.  Cleveland,  and  others.  The  best  of  these  are 
reprinted  in  C.  B.  Thompson's  "Scientific  Man- 


agement. 


>> 


' 


LECTURE  II 

fundamentals;  practice  versus  theory  in  the 
science  of  management 

It  is  not  the  author's  intention  to  imply  by  the  title  of  this 
article  that  practice  and  theory  do  not  each  l^ear  a  most  im- 
I)()rtant  part  in  the  science  of  management.  These  two  words 
are  symbolic  of  two  chief  factions,  one  for  and  one  against 
our  new  science  of  management.  To  the  layman,  scientific 
management  is  a  theory,  pure  and  simple.  To  the  manufac- 
turer, who  has  put  his  plant  under  this  form  of  manage- 
ment, it  stands  for  prosperity  to  the  firm  and  all  its  em- 
ployees, a  new  era  of  industrial  peace  and  contentment,  low 
costs  and  high  wages. 

It  is  not  at  all  remarkable  that  there  should  be  such  a  wide 
difference  of  opinion  on  this  subject.  It  would  indeed  be 
remarkable  if  it  were  not  so.  History  repeats  itself.  What 
is  now  true  of  scientific  management  has  been  in  the  past 
true  of  all  great  steps  or  changes,  tending  to  the  advance 
ment  of  the  human  race.  The  march  of  progress  in  all 
things  would  cease  were  there  no  obstacles  to  surmount. 
Columbus,  Watt,  Ericson,  Morse,  Marconi,  Langley,  Edi- 
son, Brush,  Chanute  and  the  Wright  Brothers,  as  well  as 
many  others,  were  each  and  every  one  at  first  considered 
theorists  or  cranks.  Their  dreams  of  the  possibilities  of 
their  chosen  lines  of  work  at  first  seemed  ridiculous  to  their 
contemporaries  but  the  practical  application  of  their  ideas 
has  far  outstripped  their  broadest  conception  of  these  sub- 
jects. 

There  is  no  doubt  that  the  new  science  of  management 
will  come  into  its  own  through  exactly  the  same  process  of 
transition.  The  few  chief  exponents  of  scientific  manage- 
ment are  in  exactly  the  same  position  as  were  the  inventors 
and  investigators  mentioned  above.  No  one  can  deny  that 
the  field  of  the  organizing  engineer  opens  into  vast  fields  of 

21 


22 


PRACTICE  VS.  THEORY 


progress.  The  benefits  which  will  accrue  from  the  universal 
application  of  the  new  science  of  management  will  affect  in 
a  greater  or  less  degree  all  of  the  working  class  in  this 
country,  eventually  the  world.  The  author  predicted  in  a 
lecture  before  the  New  England  Railroad  Club  at  Boston, 
December,  1904,  that  the  science  of  management  was 
"slowly  but  surely  becoming  universal  in  this  country." 
That  was  nearly  thirteen  years  ago  and  he  now  reiterates 
the  same  prophecy.  In  fact,  the  striving  for  efficiency  in 
life  as  well  as  business  is  becoming  universal  much  faster 
than  any  one,  except  the  best  informed,  realizes.  This  is 
primarily  due  to  the  fact  that  in  the  last  six  years,  scien- 
tific management  has  been  prominently  brought  to  the  at- 
tention of  the  entire  country  on  several  great  occasions. 
Chief  of  these  are : 

1.  The  Interstate  Commerce  Commission  investigation  in 
191 1  into  the  proposed  increase  in  railroad  freight  rates. 

2.  The  formation  in  New  York,  December,  191 1,  of  the 
Society  to  Promote  the  Science  of  Management. 

3.  The  conference  on  scientific  management  at  the  Amos 
Tuck  School  of  Administration  and  Finance  at  Dartmouth 
College,  in  October,  191 1. 

4.  Formation  of  the  Efficiency  Society  in  New  York,  in 
the  spring  of  19 12. 

5.  Congressional  Committee's  investigation  and  report  on 
the  Taylor  and  similar  methods  of  scientific  management  in 
1912. 

In  addition  to  the  above  mentioned  events  there  has  been 
a  general  exploitation  and  discussion  of  the  subject  in 
nearly,  if  not  all,  of  the  trade  journals,  monthly  magazines 
and  society  transactions,  to  say  nothing  of  the  newspaper 
reports,  etc.  All  of  this  publicity  has  of  course  had  its 
effect.  Fortunately  and  justly,  the  majority  of  the  articles 
and  discussions  have  been  favorable  in  their  attitude.  The 
few  which  have  not  been  so  were  obviously  written  by  per- 


FREDERIC  A.   PARK  HURST 


23 


sons  scanning  the  subject   superficially  or  with   distorted 
vision. 

I  am  sure  that  all  the  chief  supporters  and  exponents  of 
scientific  management  will  join  me  in  heartily  inviting  a 
thorough  and  impartial  investigation  of  its  principles  and 
the  results  which  follow  a  practical  application  of  those  prin- 
ciples. Such  an  investigation  is  the  easiest,  most  logical 
and  surest  way  of  enlightening  oneself  on  the  subject.  It 
is  unfortunate  that  a  number  of  would-be  critics  have  appar- 
ently not  made  a  thorough  and  impartial  study  of  this  sub- 
ject "on  the  ground."  They  have  evidently  passed  the  door 
and  guessed  as  to  what  was  within.  They  have  a  perfect 
right  to  guess,  form  their  own  opinions,  etc.,  for  their  own 
personal  satisfaction.  When  they  attempt,  however,  to  ex 
ploit  their  supposed  knowledge  of  the  subject  to  the  detri- 
ment, intentionally  or  otherwise,  of  those  directly  to  be  bene- 
fited by  the  adoption  of  scientific  management,  it  is  time 
they  and  their  followers  become  enlightened. 

There  are  undoubtedly  many  "theorists"  who  believe  that 
scientific  management  can  be  studied,  rehearsed  and  memo- 
rized in  the  school  room  or  library  and  "presto!"  an  effi- 
ciency engineer  is  born.  It  must  be  acknowledged  that 
many  efficiency  engineers  have  sprung  into  the  field  in  just 
this  way.  They  are  full  of  theory  but  not  the  theor}\  and 
without  the  practical  knowledge  of  their  subject  or  of  men. 

Many  theories  may  of  course  be  formed  by  as  many  dif- 
ferent men.  These  theories  but  reflect  the  scope  of  each 
man's  imagination  or  grasp  of  the  fundamentals.  There 
may  be  many  theories  as  to  scientific  management,  what  it 
is,  its  scope,  value,  etc.  That  these  theories  vary  so  widely 
is  but  natural.  They  are  due  entirely  to  a  lack  of  under- 
standing, or  full  comprehension  of  the  fundamental  prin- 
ciples. Mr.  Fred  W.  Taylor  defines  scientific  management 
as  a  combination  of  the  following  elements : 

A.  "Science,  not  rule  of  thumb." 

B.  "Harmony,  not  discord." 


jfj^M^ 


24 


PRACTICE  VS.  THEORY 


C.  "Co-operation,  not  individualism." 

D.  "Maximum  output  in  place  of  restricted  output." 

E.  "Development  of  each  man  to  his  greatest  efficiency 
r.nd  prosperity." 

Many  people  consider  the  above  combination  of  elements 
a  theoretical  proposition  which  works  out  easily  on  paper 
but  will  not  resolve  itself  into  a  practical  solution.  Let  us 
analyze  Mr.  Taylor's  principles  separately: 

A.  "Science,  not  rule  of  thumb."  There  has  been  much 
criticism  of  the  word  "science"  or  "scientific"  as  applied  to 
ihe  problem  of  management.  Many  critics  claim  that  there 
can  be  nothing  scientific  in  works-management  and  that  the 
word  so  used  is  incorrect.  Webster's  definition  of  science  is : 
"Systematized  knowledge  of  the  conditions  and  relations  of 
mind  and  matter;  accepted  facts  and  principles  as  demon- 
strated by  induction,  observation  or  experiment."  If  sys- 
tematized investigation  and  compilation  of  data  |>ertaining 
to  knowledge  of  the  conditions  and  relations  of  mind  and 
matter  do  not  represent  the  most  important  feature  of 
proper  management,  then  what  does?  A  common-sense 
method  of  proceeding  with  each  piece  of  work  is  to  find 

(a)  What  must  be  done. 

(b)  What  material  used. 

(c)  How  must  it  l^e  done. 

(d)  With  what  tools. 

(c)  How  long  will  it  take. 
(/)  When  will  it  be  done. 
(g)   What  will  it  cost. 

To  answer  these  preliminary  questions  satisfactorily  one 
must  have  a  complete  knowledge  of  the  equipment  and  ma- 
terial involved,  of  the  qualifications  of  the  individual  work- 
ers and  of  the  various  other  elements  entering  into  the  com- 
pletion of  each  piece  of  work.  This  comprehensive  knowl- 
edge comes  through  specially  trained  men,  detailed  to  carry 
on  and  record  all  investigations  necessary.  It  is  most  cer- 
tainly in  line  with  scientific  methods  of  procedure. 


FREDERIC  A.   PARKHURST 


25 


B.  "Harmony,  not  discord."  It  is  needless  to  say  much  in 
the  way  of  advocating  the  desirability  of  harmony  over  dis- 
cord. This  of  course  is  axiomatic  and  there  can  possibly  be 
no  sustained  criticism  of  such  a  feature  in  any  form  of  man- 
agement, whether  scientific  or  otherwise. 

C.  "Co-operation,  not  individualism."  Another  com- 
mon-sense element  which  allows  of  little  controversy. 

D.  "Maximum  output  in  place  of  restricted  output."  A 
concern  to  be  successful,  and  to  run  its  business  profitably, 
must  realize  from  its  equipment  and  working  force  a  maxi- 
mum output  and  each  must  maintain  that  condition  if  it 
hopes  to  stay  in  business  in  the  face  of  modern  competition. 
The  country  is  suffering  to-day  from  over  equipment  in  the 
way  of  plants  and  accessories.  The  result  shows  a  great 
waste  both  in  first  investment  and  indirect  charges  including 
depreciation  while  the  plant  is  running,  to  say  nothing  of 
the  great  overhead  charge  and  depreciation  in  slack  times 
when  the  plant  is  lying  idle.  Why  deny  that  maximum 
production  is  too  often  striven  for  in  a  most  unintelligent 
way  ?  As  far  as  the  personnel  is  concerned,  maximum  pro- 
duction can  only  be  obtained  by  surrounding  them  with  the 
elements  mentioned  above— science,  harmony  and  co-opera- 
tion. 

E.  "Development  of  each  man  to  his  greatest  efficiency 
and  prosperity."  Here  again  we  have  an  element  which 
should  need  but  little  argument  in  support  of  it.  In  point 
of  fact,  however,  we  often  find  opmions  to  be  diametrically 
opposed  to  what  we  would  naturally  expect  to  find.  The 
trouble,  however,  is  not  with  the  principle  involved  or  with 
the  theory  that  it  is  a  desirable  and  necessary  thing  to  strive 
for — this  maximum  efficiency  and  prosperity.  The  cause  is 
often  a  lack  of  knowledge  of  what  is  involved  and  a  deplor- 
able misunderstanding  of  the  objects  and  intentions  of  those 
striving  to  bring  about  maximum  efficiency. 

I  have  discussed  these  principles  at  some  length  and  many 
may  think  I  am  going  over  ground  which  has  already  been 
covered.  My  object,  how^ever,  in  doing  this  is  to  again  bring 


2() 


PRACTICE  VS.  THEORY 


before  those  who  have  not  clearly  analyzed  the  principles  of 
scientific  management  what  is  involved  and  just  what  the 
ideal  is.  There  has  been  too  much  taken  for  granted  on  the 
part  of  some  critics.  The  result  has  been  a  certain  factor  of 
opposition,  which  is  wholly  uncalled  for.  May  this  resume 
help  to  clear  the  subject. 

One  of  the  common  criticisms  heard  is  to  the  effect  that 
"scientific  management  may  do  for  some  kinds  of  work,  but 
it  will  not  do  in  ours."  The  exp>onent  of  the  science  of  man- 
agement must  ever  bear  in  mind  that  he  faces  an  educational 
proposition  continually.  It  is  easy  to  condemn  something 
which  one  does  not  understand.  This  being  an  admitted  fact 
and  bearing  in  mind  that  many  of  the  persons  directly  af- 
fected by  the  introduction  of  scientific  management  are  nor 
in  a  position  to  understand  these  things,  it  behooves  every 
organizing  engineer  to  pay  special  attention  to  this  one  fea- 
ture— namely,  education. 

In  considering  the  educational  feature  one  must  not  over- 
look the  psychological  element  involved.  To  the  author's 
mind  this  is  the  most  important  factor  in  the  successful  in- 
stallation of  the  science  of  management,  and  is  the  one  thing 
which  has  made  failures  from  what  would  otherwise  have 
been  successes.  That  such  failures  have  existed  cannot  be 
denied.  It  is  equally  true  that  the  trouble  has  never  been 
with  the  principles  involved  but  usually  w^ith  the  general 
unfitness  of  those  attempting  to  carry  out  the  work.  Other 
failures  can  be  traced  to  the  attempt  to  copy  and  install  some 
particular  feature  of  scientific  management  without  the  rest 
of  the  elements  necessary.  Men  attempting  to  do  this 
usually  have  a  superficial  book-knowledge  of  the  subject  and 
are  wholly  lacking  in  the  true  conception  of  the  ideals  and 
principles  involved.  Practical  shop  experience  and  the  abil- 
ity to  handle  men  are  absolute  requisites  for  the  successful 
introduction  of  the  principles  by  any  engineer. 

Before  taking  up  in  detail  some  examples  to  illustrate  the 
difference  between  the  theoretical  feature,  or  the  bare  out- 
line of  principle,  and  the  practical  method  of  installing  those 


FREDERIC  A.   PARKHURST 


127 


4 


# 


principles,  I  want  to  emphasize  the  fact  that  it  is  not  so 
much  what  you  do  in  the  way  of  radical  changes  as  in  how 
you  make  them.  Again  I  repeat  that  the  true  conception 
and  realization  of  the  psychological  element  and  its  bearing 
on  every  branch  of  management  work  must  be  recognized  as 
the  most  important  of  all  the  elements.  To  be  successful 
ihe  organizing  engineer  must  master  the  psychological  fea- 
ture of  each  and  every  problem  first,  last  and  always. 

Now  as  to  the  methods  used  in  the  practical  application  of 
the  above  mentioned  principles,  the  organizer  must  thor- 
oughly acquaint  his  client  wath  what  is  involved  in  order  to 
realize  from  these  principles  maximum  results.  Stockhold- 
ers, directors  and  ofificers  of  the  company  must  be  informed 
^s  to  what  may  be  expected  in  the  way  of  results.  They 
should  thoroughly  study  all  phases  of  the  problem  and  try 
to  realize  the  difTficulties  likelv  to  be  met.  Not  the  least  of 
these  will  be  the  idiosyncrasies  and  biased  ideas  of  some  of 
the  personnel.  The  fact  must  not  be  lost  sight  of  that  at 
least  some  of  the  older  and  most  valuable  employees  must 
be  patiently  and  carefully  weaned  from  some  or  most  of 
their  old  traditions  and  habits.  Those  of  the  old  school  must 
not  be  blamed  if  at  first  they  show  ignorance  or  disapproval 
of  radical  changes.  Their  environment  and  training  is  re- 
sponsible for  this  frame  of  mind.  These  same  men  will  be 
the  most  enthusiastic  and  the  strongest  supporters  of  the 
new  regime  when  they  begin  to  see  its  advantages.  They 
will  be  the  first  to  show  a  new  and  lasting  sense  of  satis- 
faction and  contentment  with  the  elimination  of  friction,  the 
maintenance  of  schedules  and  the  increased  results  easily 
accomplished  with  a  minimum  of  mental  and  physical 
outlay. 

The  period  of  transition  is  often  a  long  and  annoying  one 
for  all  concerned.  This  is  due  to  the  many  variables  to  be 
overcome.  Patience  and  tact  will  win  out  in  the  end  if  each 
and  every  one  realizes  that  every  one  is  human  after  all. 
Time  is  the  essential  factor,  and  the  time  required  depends 
upon  the  mental  attitude  of  each.    The  author  to-day  enjoys 


28 


PRACTICE  VS.  THEORY 


the  friendship  and  co-operation  of  many  men  now  working 
under  scientific  management,  who  at  first  opposed  him  at 
every  turn  and  condemned  new  methods  before  sufficient 
time  had  elapsed  to  prove  their  worth.  Men  must  be  shown, 
educated,  led,  not  driven.  It  is  only  the  extreme  case  where 
in  the  end  a  man  has  to  be  removed  for  failure  to  al)ide  by 
the  new  order  of  things.  Study  each  man's  charticter,  find 
the  avenue  of  approach  and  he  can  be  educated  and  made 
efficient  in  spite  of  himself.  Many  men,  particularly  those 
in  the  more  responsible  positions,  have  a  natural  and  deeply 
rooted  antipathy  for  being  shown  by  others.  They  wish 
lo  be  known  and  recognized  as  the  originator  of  all  that  is 
new  or  an  improvement  over  the  existing  order  of  things. 
It  has  been  my  experience  that  one  of  the  best  and  surest 
ways  of  handling  persons  of  this  make-up  is  to  accomplish 
the  desired  end  through  suggestion.  In  the  majority  of 
cases  a  few  words  followed  judiciously  with  concrete  ex- 
amples to  illustrate  your  point  will  sow  the  seed  of  desire. 
This  seed  will  immediately  take  root  and  sprout  forth  as  an 
(.riginal  and  newly  discovered  method  sure  to  meet  the 
exigencies  of  the  occasion.  This  method  will  not  do  with  all 
men  of  this  mental  attitude.  Some  will  not  be  influenced  or 
convinced  until  shown  by  actual  accomplishment.  Others 
can  be  recruited  by  the  proper  presentation  of  the  results  of 
an  analytical  study  of  conditions  followed  by  cold,  impartial 
figures.  Figures  talk,  especially  if  they  are  always  recap- 
itulated into  a  bare  statement  of  value  in  dollars  and  cents. 
Other  men  will  l:>e  found  in  every  organization  who  have 
an  inherent  faith  in  any  new^  departure  ordered  by  their 
superiors.  Such  cases  do  not  offer  the  same  kind  of  handi- 
cap, as  do  those  above  cited.  They  do  offer  another  possible 
source  of  trouble  however:  that  of  a  too  earnest  wish  to 
reach  the  desired  goal,  without  due  appreciation  of  the  diffi- 
culties and  conditions  to  be  overcome  and  changed.  Mate- 
rial difficulties  can  be  removed  with  comparative  ease. 
Changes  directly  affecting  the  personnel  are  often  far  from 
easy  and  continual  restraint  must  be  exercised  for  this  rea- 
son.    If  this  restraint  is  not  present  the  too  enthusiastic 


,i 


FREDERIC  A.   PARKHURST 


29 


department  head  or  some  subordinate  will  find  himself  op- 
posed by  a  stone  wall  of  personal  opposition.  Many  men 
can  be  led  but  only  the  few  can  be  pushed. 

Education  of  the  rank  and  file  is  fully  as  important  as  the 
education  of  the  principals  and  heads  of  departments.  The 
education  of  the  former  is  much  easier,  however,  when  the 
latter  have  graduated,  so  to  speak.  Let  those  at  the  top  set 
the  example.  Shop  men  as  a  rule  have  the  erroneous  idea 
that  their  superiors  and  office  force  are  inclined  to  consider 
themselves  on  a  much  higher  plane  and  seemingly  force 
themselves  to  the  necessary  intercourse  with  those  beneath 
them.  There  is  no  doubt  but  that  in  many  cases  this  con- 
dition exists.  That  it  is  often  so  is  most  unfortunate  as 
w^ell  as  unnecessary — and  most  undesirable.  One  of  the 
greatest  advantages  of  real  scientific  management  lies  in  the 
fact  that  such  a  demoralizing  and  disastrous  condition  of 
affairs  is  eliminated.  I  do  not  mean  to  imply  by  this  state- 
ment that  scientific  management  is  the  sole  remedy  for  such 
a  condition,  but  it  is  nevertheless  a  sure  remedy.  In  point 
of  fact,  under  scientific  management  the  rank  and  file  are 
placed  in  position  to  demand  and  get  from  their  superiors 
proper  working  conditions,  and  as  to  maintenance  of  equip- 
ment and  supply  of  material,  to  get  co-operation,  and  the 
"square  deal."  Responsibility  is  placed  where  it  belongs. 
No  one  high  or  low  can  "put  it  over"  on  another,  because 
the  responsibilities  and  duties  of  each  are  clearly  defined  in 
writing.  The  pressure  of  responsibility  is  not  one  sided  and 
concentrated  in  one  place,  or  directed  towards  the  weak.  It 
is  equalized.  Instead  of  turmoil  and  contention  like  the 
troubled  and  restless  sea,  which  makes  smooth  running  im- 
possible, we  have  the  calm  and  reliable  medium  of  a  harlx)r 
sheltered  by  the  bulwarks  of  harmony.  The  least  opposing 
influence  immediately  becomes  apparent.  It  can  be  localized 
and  remedied  at  once. 

The  best  influence  is  an  honest  confidence  in  the  entire 
personnel.  An  efficient  organization  with  reliable  heads  and 
a  spirit  of  co-operation  in  touch,  through  these  mediums, 


j 

?      4 


i 


30 


PRACTICE  VS.  THEORY 


with  all  of  the  personnel,  lays  the  foundation  for  a  lasting 
and  trouble-free  industrial  or  business  condition.  To  bring 
about  these  conditions  eternal  vigilance  is  necessary.  No  one 
must  be  allowed  to  harbor  any  misunderstanding  as  to  the 
intent  of  the  reorganization.  Investigate  and  trace  to  its 
source  every  disturbing  influence.  Let  no  one  misunder- 
stand the  ultimate  object  in  view.  Openly  advertise  and 
propound  the  chief  elements  or  principles  of  our  new  science 
of  management. 

A.     Science,  Not  Rule  of  Thumb 

Having  observed  the  above  essentials,  the  next  step  is  to 
bring  under  control  equipment,  methods  and  output.  This 
has  formerly  been  left  to  the  foreman  and  bosses.  Details 
and  responsibilities  have  been  thrust  upon  them  which 
should  be  borne  by  others.  Specialization  is  the  order  of 
the  day  under  scientific  management. 

The  modern  planning  room  is  the  first  really  radical  inno- 
vation. The  production  clerk,  order-of-work  clerk,  route 
clerk,  material  boss,  shop  engineer,  time-study  man  and 
speed  bosses,  are  new  functional  men.  These  are  created 
to  take  off  of  the  shoulders  of  foremen  and  others,  duties 
for  which  they  are  specially  trained.  Through  this  depart- 
ment we  begin  to  control  shop  equipment,  methods  and 
material. 

The  different  planning-room  men  begin  through  analyti- 
cal study  of  conditions  to  determine  the  shop  conditions. 
Work  for  the  shops  is  planned  and  distributed  in  the  most 
efficient  way.  Delays  due  to  faulty  equipment  are  investi- 
gated and  a  recurrence  made  impossible.  Equipment  is 
tuned  up,  cared  for  and  kept  in  repair.  The  result  is  that 
each  machine  and  man  is  made  more  productive.  There 
are  no  waits  or  delays  on  account  of  absence  of  material 
with  which  to  work.  Some  men  or  machines  are  not  piled 
up  with  work  while  others  work  from  hand  to  mouth.  The 
work  ready  for  processing  is  evenly  and  judiciously  distrib- 
uted.    I  have  known  of  cases  where  one-third  (1-3)  of  a 


FREDERIC  A.  PARKHURST 


31 


day  of  man  and  machine,  often  of  gangs  of  men,  has  been 
wasted,  due  to  such  causes.  This  condition  is  common ;  the 
effect  is  demoralizing  and  tends  to  gradually  decrease  the 
daily  output  per  man.  Over  equipment  due  to  lack  of  plan- 
ning and  to  pure  guesswork  is  also  largely  responsible  for 
a  decreased  output  per  capita.  Production  clerk,  order-of- 
work  clerk,  route  clerk,  and  material  boss  remedy  this. 

Having  provided  for  the  maintenance  of  standardized 
equipment,  conditions  and  flow  of  material,  the  methods 
must  be  investigated.  The  shop  engineer  determines  the 
tools  and  methods;  the  time-study  boss  determines  the 
standard  time,  and  the  data  is  available  for  the  issuance  of 
instruction  cards.  The  speed  bosses  then  see  that  the  in- 
struction cards  are  followed  and  the  standard  time  realized. 


( 


LECTURE  III 

fundamentals;  practice  versus  theory  i:^  the 
SCIENCE  OF  management  ( Continued) 

It  will  be  seen  by  the  above  brief  explanation  (see  Lec- 
ture 2)  that  what  is  ordinarily  done  by  one  or  two  men  is 
(lone  under  scientific  management  by  six  or  seven  or  more, 
depending  upon  the  kind  of  business.  What  is  the  result? 
Each  of  the  chief  planning  room  men  becomes  highly  profi- 
cient in  his  particular  branch.  Through  them  it  is  possible 
to  itemize  and  analyze  into  small  elements  all  details  of  a 
business.  They  have  complete  and  up-to-date  records  of  all 
work  which  has  been  done.  Comparison  can  be  made,  both 
of  methods,  quality,  tiuic  and  cost.  Relative  capacity  of  ma- 
chines, men.  productive  units  and  departments  can  be  made, 
and  work  planned  and  distributed  accordingly.  Elemental 
operations  can  be  standardized,  and  men  can  be  trained  to 
do  them  in  standard  time  with  a  minimum  of  effort.  Each 
man's  efficiency  can  be  kept  track  of  and  his  work  and  pay 
regulated,  independent  of  his  fellow  workmen.  The  ac- 
cumulation of  data  makes  possible  the  correct  determination 
of  how  much  men  as  well  as  machines  can  do  daily  without 
undue  fatigue  and  eventual  break-down.  We  can  safeguard 
our  machines  by  not  overloading  them,  because  stresses  due 
to  tool  pressure,  torque  and  vibration,  can  be  controlled 
through  instruction  cards.  Fewer  accidents  will  occur  on 
this  account  because  detailed  study  of  operations  determines 
the  best  and  safest  way  to  do  a  given  piece  of  work.  Not 
many  people  realize  how  comparatively  few  different  ele- 
mental operations  are  actually  necessary  for  the  performing 
of  all  kinds  of  work  in  any  one  trade,  until  they  have 
analyzed  and  studied  them  personally. 

Consider  the  above  carefully  and  then  answer  the  follow- 
ing questions  for  yourself.     Can  any  foreman  who  is  in 

32 


FREDERIC  A.   PARKHURST 


33 


charge  of  the  average  sized  department  with  all  its  variety 
of  equipment  and  its  twenty-five  to  fifty  or  more  men,  keep 
track  of  all  the  above  elements  and  so  obtain  maximum  effi- 
ciency? Were  he  mentally  and  physically  capable  of  all  the 
work  necessary,  could  he  be  an  expert  and  highly  proficient 
in  so  many  different  lines  ?  Could  he  even  find  time  to  both 
plan  and  execute  on  the  scale  required  ?  Would  he  be  in  pos- 
session of  the  data  necessary  to  absolutely  control  methods, 
conserve  the  time  of  each  man,  eliminate  delays,  etc.  ?  Could 
he  be  always  fair  and  just  and  impartial  in  handling  his 
men?  The  answer  is  most  emphatically  no.  A  jack  of  all 
trades  is  master  of  none.  Yet  ordinary  management  often 
demands  of  its  foreman  all  of  the  above  and  more. 

What  will  the  planning  room  accomplish  for  a  concern? 
Combined  with  bonus  system  of  extra  remuneration,  it  will 
result  in  doubling,  tripling,  and  sometimes  quadrupling  the 
output  of  a  plant.  It  will  reduce  labor  costs,  including  the 
extra  overhead  from  30  per  cent,  to  50  per  cent,  and  in- 
crease wages  from  35  per  cent,  to  50  per  cent. — in  some 
cases  even  more. 

A  word  will  not  be  out  of  place  regarding  obvious  advan- 
tages of  these  methods  in  setting  correct  rates.  It  is  not  un- 
usual to  find  piece  or  premium  rates  set  by  the  usual  guess- 
work methods  that  allow  a  man  to  earn  $7.00  to  $8.00  per 
day  for  much  less  return  than  represents  a  fair  day's  work. 
I  have  known  of  several  cases  where  a  piece  rate  was  cut 
nearly  in  halves  because  the  man  was  earning  about  $8.00 
per  day.  After  the  cut  he  still  earned  $8.00.  Obviously  the 
original  rate  was  four  times  what  it  should  have  been.  The 
work  did  not  require  skilled  help  and  $4.00  per  day  would 
be  a  generous  wage.  Aside  from  this,  the  man  was  limiting 
output  during  the  time  he  was  making  on  the  original  rate. 
He  doubled  his  output  when  the  rate  was  ait.  Had  stop 
watch  observations  been  made  by  a  properly  trained  time 
study  man,  preferably  one  who  was  skilled  in  the  trade 
under  observation,  this  could  not  have  happened.  The  re- 
sult of  improperly  set  rates  need  not  be  discussed  here  at 


{ 


34 


PRACTICE  VS.  THEORY 


length.  They  include  dissatisfaction  on  the  part  of  the  firm ; 
the  inevitable  cut  and  continual  dissatisfaction  on  the  part 
of  the  men;  limitation  of  output;  increase  of  discontent  and 
deceit  and  eventually  labor  troubles.  The  elimination  of 
these  troubles  will  save  many  times  more  each  year  than  it 
costs  to  run  a  planning  room. 

When  a  foreman  sets  a  rate,  he  estimates  it  by  using  day- 
work  output  as  a  basis.  He  adds  something  to  it  for  luck 
and  sets  his  rate.  Actually  the  rate  of  day-work  under  or- 
dinary shop  conditions  as  compared  to  bonus  work  under 
scientific  conditions  is  i  to  3  or  4  on  the  average ;  some  cases 
I  to  10  or  even  more. 

There  are  certain  difficulties  to  overcome  when  establish- 
ing bonus  in  a  plant  accustomed  to  piece  or  premium  im- 
properly set.     These  difficulties  consist  chiefly  of  a  marked 
difference  in  the  maximum  earning  power  of  a  man  based 
on  a  bonus  rate  set  after  an  itemized  time  study,  as  com- 
pared to  the  arbitrary  piece  or  premium  rate.   The  preceding 
paragraph  has  explained  in  part  what  these  differences  are. 
In  addition,  however,  to  the  difference  in  the  ultimate  day's 
earnings,  more  trouble  is  met  with  in  trying  to  educate  the 
workman  to  an  entirely  new  viewpoint.     This  can  best  be 
explained  by  calling  attention  to  the  fact  that  what  we  pur- 
chase is  a  man's  time  and  not  his  output.     It  is  up  to  the 
organization  to  see  that  a  fair  output  per  day  is  realized. 
When  this  output  reaches  a  fair  average  maximum,   the 
extra  remuneration  is  in  the  form  of  a  bonus,  the  result 
being  an  increased  daily  earning.     Comparing  a  differential 
bonus  scale  of  prices,  however,  the  tendency  on  the  part  of 
the  man  is  to  consider  it  only  as  a  piece  rate.     To  further 
illustrate  this  point,  if  we  have  a  job  that  has  been  paying 
seven  cents  (7c)  a  piece  and  the  production  has  been  about 
fifty  pieces  per  day,  the  piece  rate  earning  of  the  man  is 
$3-50-     I^  this  method  of  payment  is  replaced  with  differ- 
ential bonus,  the  tendency  is  to  compare  the  difference  in 
earnings  of  the  day  for  the  last  few  pieces.     The  result  is 
that  the  man  feels  he  is  being  paid  at  only  the  rate  of  say. 


FREDERIC   A.    PARKHURST 


35 


two  cents  (2c)  a  piece,  losing  sight  altogether  of  the  fact 
that  he  has  been  assured  of  his  nominal  day  rate  irrespec- 
tive of  his  production. 

The  above  mentioned  troubles  are  not  found  where  im- 
properly set  piece  or  premium  rates  do  not  exist.  Neither 
is  there  similar  trouble  in  establishing  bonus  rate  in  a  shop 
which  has  worked  only  under  regular  hourly  or  daily  wage. 
One  often  has  to  contend  with  the  natural  antagonism  of 
some  men  who  feel  that  the  installation  of  bonus  is  some 
means  in  disguise  of  further  reducing  their  earning  power. 
This  objection,  however,  can  readily  be  overcome  after  the 
men  realize  that  the  rates  will  be  established  correctly  in 
the  first  place,  and  remain  unchanged  so  long  as  the  piece 
or  job  remains  unchanged,  in  design,  method  or  equipment. 
Of  course  guaranty  not  to  change  rates  would  as  readily 
apply  to  piece  or  premium  work  under  like  conditions.  The 
trouble,  however,  is  that  piece  or  premium  work  is  usually 
priced  arbitrarily  and  so  results  in  unfair  rates,  both  to  the 
man  and  to  the  firm.  Therefore,  it  is  practically  impossible 
to  guarantee  any  permanency. 

B.     Harmony,  Not  Discord 

This  is  the  second  element  of  the  combination  defined  by 
Mr.  Taylor.  How  often  we  hear  the  criticism  that  harmony 
is  realized  in  almost  all  lines  of  business  and  that  it  has 
nothing  whatever  to  do  with,  neither  should  it  be  particu- 
larly identified  with,  scientific  management.  If  this  is  so, 
and  if  harmony  is  such  a  well-understood  and  common  ele- 
ment, why  don't  we  see  more  of  it  in  the  average  manufac- 
turing or  industrial  establishment?  The  fact  remains  that 
in  a  great  many  instances,  harmony  is  conspicuous  by  its 
absence.  Many  of  the  chief  reasons  for  this  condition  can 
be  traced  directly  to  the  case  illustrated  in  the  last  few  pre- 
ceding paragraphs.  Its  absence  is  often  due  to  that  great 
variable  the  personal  factor.  This  is  particularly  so  in  large 
plants  which  have  grown  rapidly  and  abnormally.  Their 
sudden  growth  has  demanded  the  mushroom  type  of  or- 


36 


PRACTICE  VS.    TIIKORV 


ganization  which  must  of  necessity  lack  the  refinement  of 
one  more  deliberately  planned. 

There  are  a  great  many  factors  tending  to  create  discord, 
some  of  which  require  an  immense  amount  of  time  to  re- 
move. As  far  as  the  personnel  is  concerned,  this  can  be 
handled  and  developed  in  the  way  previously  referred  to  in 
this  article.  When  that  is  accomplished  the  next  move  is  to 
inspire  everyone  with  the  ix)licy  that  only  the  square  deal 
will  prevail.  To  bring  alx>ut  this  condition,  extremely  strict 
order  of  discipline  must  be  maintained  and  the  ix)licy  of  the 
company  clearly  defined  so  that  everyone  can  work  in  har- 
mony with  it.  Each  member  of  the  organization  must  be 
forced  to  realize  the  fact  that  everyone  is  employed  to  work 
for  the  company's  interests,  and  co-operate  and  work  in 
harmony  with  his  associates.  Discrimination  of  individuals 
must  be  absolutely  prohibited.  This  latter  dictum  is  one 
likely  to  be  far-reaching  in  its  nature.  Men  have  to  be 
trained  to  lay  aside  their  personal  likes  and  dislikes  and  to 
regard  their  work  from  an  entirely  different  viewpoint. 
This  is  hard  at  first,  but  after  they  become  accustomed  to 
the  new  order  of  things  and  begin  to  realize  the  certain  ad- 
vantage, it  is  as  natural  to  work  harmoniously  as  otherwise, 
and  much  more  comfortable. 

One  of  the  greatest  disturbing  elements  in  connection 
with  building  an  efficient  and  harmonious  organization  is 
the  one  of  poor  pay.  It  is  a  mistaken  idea  on  the  part  of 
many  managers  and  heads  of  departments  that  they  are 
earning  money  for  the  company  and  running  their  depart- 
ment cheaply  by  the  employment  of  cheap  help.  This  is  as 
true  of  office  employees  as  it  is  of  the  rank  and  file.  The 
layman  little  realizes  the  actual  difference  between  output 
per  man  as  compared  to  large  differences  in  pay  i)er  man. 
For  example,  many  cases  can  be  cited  where  a  man  earning 
$2.50  has  an  output  which  can  be  expressed  by  unity;  by 
an  expenditure  of  more  money  for  sufficient  sui>ervision, 
proper  maintenance  of  equipment,  etc.,  plus  extra  incentive 
to  the  man  for  following  instructions  and  putting  up  a  fair 


FREDERIC  A.  PARKHURST 


37 


day's  work,  a  production  can  be  realized  which  may  be  ex- 
pressed by  3  or  4  and  sometimes  much  more. 

The  difficulties  in  the  way  of  remedying  this  condition 
while  promoting  harmony  are  very  many.  This  statement 
may  seem  strange,  but  it  is  nevertheless  true.  In  many  cases 
the  greatest  objection  comes  from  those  who  are  eventually 
to  be  directly  benefited  by  this  change  of  condition.  The 
average  shop  man  presents  another  stumbling  block  by  con- 
sidering his  own  particular  work  more  or  less  his  private 
asset,  of  which  the  firm  should  know  little  or  nothing.  In 
other  words,  he  feels  that  the  more  dependent  the  firm  is 
upon  him  for  information,  the  more  secure  his  position  with 
them  will  be.  The  fact  is  lost  sight  of  that  promotion  is 
often  denied  a  man  because  through  lack  of  organization 
and  knowledge  on  the  part  of  the  firm,  he  is  forced  to  re- 
main in  a  minor  position.  When  data  of  each  man's  ability 
is  in  the  hands  of  the  firm,  advancement  can  be  made  com- 
mensurate with  his  ability  without  in  any  way  tending  to 
disrupt  or  retard  his  work  or  that  of  his  department.  In 
order  to  bring  about  this  condition  and  establish  a  self-sus- 
taining organization,  each  incumbent  of  important  posi- 
tions, including  heads  of  departments,  should  train  and  have 
immediately  under  him  a  successor  competent  to  take  over 
his  duties  and  responsibilities  at  a  moment's  notice.  This 
condition  can  pertain  to  a  small  organization  as  well  as  to 
a  large  one.  A  man  may  often  fulfill  the  duties  of  several 
positions  where  the  duties  of  one  do  not  require  all  of  his 
dailv  time. 

C.     Co-operation,  Not  Individualism 

This  element  in  a  general  way  can  be  considered  in  the 
same  manner  as  harmony.  Individualism  in  the  ordinary 
form  of  management  can  be  likened  to  co-operation  under 
scientific  management  in  much  the  same  way  as  individual 
effort  among  a  body  of  men  can  be  compared  to  well-trained 
and  highly-organized  team  work.  Our  modern  professional 
baseball  team  is  probably  one  of  the  greatest  examples  of 
scientific  management  before  the  world  today.     The  fact  is 


1} 


38 


PRACTICE  VS.  THEORY 


little  realized  by  the  thousands  of  enthusiastic  fans  who 
watch  one  of  our  league  games.  Great  enthusiasm  is  often 
manifested  over  some  startling  or  spectacular  play  on  the 
part  of  an  individual  which  may  appear  to  be  absolutely 
spontaneous.  The  truth  of  the  matter  is  that  the  majority 
of  such  plays  have  been  carefully  worked  out  by  long  and 
tedious  practice  and  intricate  time  studies.  The  result  is 
that  with  the  player  on  base  and  the  ball  in  a  certain  part 
of  the  field,  or  in  the  hands  of  a  pitcher  about  to  be  played, 
the  success  of  the  proposed  play  can  almost  invariably  be 
predetermined.  This  has  been  brought  down  to  an  exact 
science. 

It  may  seem  ridiculous  to  say  that  the  modern  battleship  is 
handled  and  controlled  by  a  planning  department ;  neverthe- 
less this  is  exactly  true.  The  handling  of  a  battery  of  large 
guns  in  record  time  and  the  percentage  of  hits  which  ten 
years  ago  seemed  absolutely  impossible,  involves  the  co- 
operation of  a  great  many  different  men.  The  use  of  highly 
perfected  instruments,  combined  with  the  predetermined 
condition  of  the  atmosphere,  variations  and  speed  of  the 
wind,  weight  and  condition  of  powder,  etc.,  all  enter  into 
the  problem.  In  the  report  of  the  battle  of  Santiago,  our 
patriotic  and  enthusiastic  populace  marveled  at  the  feats  of 
gunnery  and  markmanship  displayed  by  the  United  States 
battleships.  The  truth  is  that  today  it  would  be  considered 
a  most  disgraceful  exhibition.  Only  five  per  cent  of  the 
shots  fired  at  Santiago  reached  the  mark  and  at  compara- 
tively short  ranges.  Today,  under  like  conditions,  from 
sixty-five  to  seventy-five  per  cent  of  the  shots  would  reach 
their  marks  and  at  ranges  mounting  as  high  as  eight  or 
nine  thousand  yards,  and  at  speeds  double  those  involved 
in  1898. 

In  industrial  establishments  like  comparisons  can  be  made. 
Investigation  will  show  an  immense  amount  of  duplication 
between  departments.  Similar  operations  in  like  trades  will 
be  found  to  vary  w^idely  in  method  and  more  widely  yet  in 
time  consumption.    Each  journeyman  has  his  own  particu- 


FREDERIC  A.   PARKHURST 


39 


lar  idea  of  how  his  work  should  be  prepared,  how  his  tools 
should  be  forged  or  ground,  and  the  condition  of  the  ma- 
terial with  which  he  works.  Thus  these  elements  become 
great  variables  because  the  whim  and  biased  notions  of  the 
individual  make  them  so.  Standardization  of  these  elements 
greatly  simplifies  them.  Lack  of  unity  of  purpose  and  ideals 
results  in  the  individual  limiting  himself  and  his  chances  of 
advancement  as  well  as  limiting  that  most  vital  of  all  in- 
terests, his  earning  power. 

Complete  co-operation  and  unity  of  men,  methods  and 
equipment  will  revolutionize  the  entire  tone  and  capacity  of 
a  plant.  Where  departmental  functions,  both  as  a  whole 
and  in  detail,  do  not  thoroughly  dovetail  into  a  harmonized 
whole,  friction  and  disruption  will  exist.  It  is  a  well-known 
fact  that  we  are  not  today,  as  a  rule,  turning  out  the  high- 
class,  all-around  mechanics  that  we  did  years  ago.  The 
reason  for  this  is  obvious,  although  the  remedy  for  it  is  not 
so  obvious  to  the  layman.  There  can  be  no  dispute  over 
the  fact  that  scientific  management  favors  the  apprentice, 
handyman  and  journeyman  rather  than  the  firm  itself. 
When  organized  labor  realizes  what  scientific  management 
actually  is,  they  will  find  they  have  much  more  to  gain  by 
co-operation  and  acceptance  of  its  principles  than  they  can 
hope  to  gain  by  any  other  method.  This  statement  can  be 
easily  proved  by  investigating  the  plants  working  today 
under  its  form  of  management. 

It  may  be  well  here  to  cite  a  remark  made  by  the  superin- 
tendent of  a  large  and  well-established  industrial  plant  in  the 
East.  In  speaking  to  one  of  our  noted  efficiency  engineers 
of  the  work  which  was  being  accomplished,  he  said  that  his 
firm  would  be  thoroughly  satisfied  if  the  only  benefit  they 
realized  from  scientific  management  was  the  increased  wage 
and  higher  moral  standing  of  their  men  and  the  attendant 
prosperity  which  would  accrue  from  the  change.  This  state- 
ment expresses  a  sentiment  which  many  of  the  laboring 
class  cannot  acknowledge  exists  on  the  part  of  the  manu- 


40 


PRACTICE  VS.  THEORY 


facturer.  Such  sentiment  is  growing,  however,  and  that 
the  fact  is  not  more  fully  realized  by  the  working  man  is  to 
be  regretted. 

D.     Maximum  Output  in  Place  of  Restricted  Output 

Reference  has  previously  been  made  in  this  article  to  the 
ratio  of  production  under  ordinary  management  to  that 
under  scientific  management.  A  great  part  of  this  is  due, 
of  course,  to  the  change  in  organization,  plant  methods,  etc. 
The  balance  is  due  to  the  increased  effort  and  interest  ex- 
hibited by  the  men,  encouraged  by  a  higher  average  of 
w^age.  The  natural  incentive  on  the  part  of  the  men  is  lack- 
ing unless  all  elements  referred  to  are  present.  As  soon  as 
a  betterment  of  condition  has  been  realized,  men  are  men- 
tally in  a  different  attitude,  and  will  naturally  exert  them- 
selves to  earn  the  additional  compensation. 

The  demoralizing  effect  of  incorrect  rate  setting  cannot 
be  over  emphasized.  It  tends  to  promote  a  disposition  lo 
deceive  and  restrict  output.  Such  a  condition  naturally 
breeds  discontent  and  lack  of  confidence  in  the  management. 
One  must  rely  largely  on  the  individual's  tendency  to  better 
his  own  condition  when  the  opportunity  presents  itself. 
When  the  man  learns  how  to  produce  his  maximum  with 
the  prospect  of  a  definite  and  immediate  reward,  he  finds 
more  pleasure  in  his  work.  He  is  mentally  in  condition  to 
aspire  to  do  the  best  that  is  in  him  and  he  develops  the 
natural  pride  which  is  more  or  less  latent  in  everyone. 

E.     Development  of  Each  Man  to  His  Greatest 
Efficiency  and  Prosperity 

This  development  comes  as  a  natural  result  of  the  pre- 
ceding elements  working  in  accord.  The  highly-trained 
and  efficient  men  receiving  a  large  weekly  pay  make  better 
citizens  than  the  inefficient  and  underpaid.  They  are  en- 
abled to  do  better  for  their  families,  as  to  housing,  clothing, 
and  feeding  them,  and  they  are  enabled  to  give  their  chil- 


FREDERIC  A.  PARKHURST 


41 


dren  better  education.  There  are  many  children  of  today 
denied  the  education  that  belongs  to  them  with  the  result 
that  their  entire  after-life  is  handicapped.  They  are  denied 
the  advancement  and  opportunities  which  are  more  and 
more  becoming  subject  to  the  individual's  mental  develop- 
ment. If  the  little  red  schoolhouse  is  to  represent  one  of 
our  chief  constitutional  pillars  in  which  we  take  so  much 
pride,  it  must  be  supported  by  a  high  standard  of  American 
citizenship.  What  this  really  means  can  only  be  fully  ap- 
preciated by  the  study  of  home  conditions  in  a  largely  for- 
eign community  employing  low-grade  and  comparatively 
ignorant  help.  The  development  of  a  healthy  mind  and 
body  while  young  is  the  only  possible  mainstay  to  a  cosmo- 
politan nation  such  as  this  United  States  is  growing  into. 
As  efficiency  will  bring  about  the  increase  in  wages,  so  it 
w^ill  ultimately  result  in  the  decreased  cost  of  the  necessities 
of  life.  In  other  words,  when  we  become  universally  ineffi- 
cient, both  individually  and  collectively,  in  all  walks  of  life 
ranging  from  the  farm  to  the  banking  house,  our  net  return 
per  capita  is  going  to  be  greatly  increased. 

We  must  make  radical  changes  in  most  of  our  traditional 
ways  of  doing  things  and  we  must  realize  a  new  standard 
of  ideals.  This  can  only  be  brought  about  by  a  long  and 
painstaking  course  of  hard  knocks  and  experience.  Stu- 
dents of  this  subject  should  study  it  from  the  practical 
standpoint  and  by  close  detailed  investigation  of  its  actual 
workings.  It  is  not  in  any  sense  a  subject  to  be  learned 
trom  books,  but  one  which  must  be  learned  from  close 
contact  with  and  thorough  understanding  of  the  personal 
element  involved.  Only  in  this  way  can  the  psychological 
conditions  be  fully  appreciated  and  understood. 


LECTURE  IV 

"^PUT  YOUR  HOUSE  IN  ORDER"' 

Up  to  the  present  time  only  a  small  minority  of  foundry- 
men  have  taken  up  scientific  management  to  any  great  ex- 
tent. This  may,  perhaps,  be  due  to  the  fact  that  the  litera- 
ture on  the  subject  has  been  devoted  almost  exclusively  to 
other  branches  of  manufacture.  The  foundry  offers  fully 
as  large  a  field  for  conservation  of  materials  and  human 
energy  as  does  the  steel  mill,  machine  shop,  printing  house 
or  textile  mill. 

The  foundry  man  is  probably  more  or  less  familiar  with 
what  is  being  accomplished  through  the  application  of  the 
science  of  management  to  trades  other  than  the  foundry. 
He  may  not  realize  what  the  adoption  of  such  principles 
would  mean  to  his  own  particular  business.  In  treating  this 
subject  the  writer  confines  himself  strictly  to  the  practical 
side  of  the  question  based  upon  his  own  actual  experience, 
as  he  believes  that  the  science  of  management  can  be  most 
clearly  interpreted  when  so  specifically  treated.  The  limits 
of  this  paper  will  not  permit  much  detail,  but  it  is  hoped 
that  an  interest,  commensurate  with  possible  results,  may 
be  aroused  from  the  foundryman's  point  of  view. 

The  preliminaries  necessary  to  getting  "your  house  in 
order"  measure  the  results  you  can  obtain.  There  is  much 
to  be  considered  before  the  detail  of  reorganization  actually 
commences.  This  fact  is  too  often  overlooked,  and  partial 
or  entire  failure  follows,  because  the  foundation  did  not 
contain  the  essential  factors.  These  prerequisites  involve 
both  the  owner  or  stockholders  upon  the  one  hand,  and  the 
organizing  engineer  upon  the  other.  They  may  be  consid- 
ered under  the  following  heads :  Owners'  responsibilities 
require : 

A.  An  intelligent  general  knowledge  of  the  science  of 
management  in  theory  and  in  practice. 

42 


FREDERIC  A.  PARKHURST 


43 


B.  An  acquaintance  with  plants  now  running  under  such 
principles. 

C.  A  clear  perception  of  their  own  plant  conditions  and 
organization  in  comparison  with  the  more  complex  methods 
based  upon  the  science  of  management. 

D.  An  understanding  of  the  radical  changes  which  must 
be  made  from  the  established  conventions. 

E.  A  thorough  investigation  into  the  experience  and 
qualifications  of  the  organizing  engineer. 

F.  An  absolute  support  and  recognition  of  the  authority 
of  the  organizing  engineer,  once  he  assumes  his  duties. 

G.  A  complete  realization  of  the  importance  of  the  con- 
trolling factor,  "time." 

The  organizing  engineer's  responsibilities  require : 

H.    A  preliminary  inquiry  into  the  business,  plant,  and 

owner's  relations  to  same,  as  well  as  their  conception  of  the 
science  of  management  and  their  ability  to  see  the  installa- 
tion of  such  carried  to  completion. 

/.  A  report  upon  necessary  changes  which  shall  incor- 
porate recommendations  and  the  probable  improvements  to 
accrue. 

/.  A  study  of  the  personnel  and  plotting  of  the  organiza- 
tion. 

K.  A  determination  upon  a  method  of  procedure  which 
shall  expedite  the  reorganization  along  lines  consistent  with 
best  permanent  results,  a  minimum  cost,  and  relief  of  great- 
est elements  of  inefficiency  as  soon  as  possible. 

L.  The  establishing  of  a  self-sustaining  organization, 
supported  by  clearly  defined  ideals,  written  instructions,  au- 
tomatic reward  for  efficient  work  with  the  personal  factor 
a  paramount  one. 

The  above  items  cover  the  chief  factors  which  demand 
serious  consideration.    Let  us  discuss  them  individually. 


44 


PUT    YOUR    HOUSE   IN    ORDER 


A.  An  owner  decides  in  an  enthusiastic  moment  to  put 
his  plant  under  the  new  science  of  management.  It  is  not 
sufficient.  Such  a  decision  should  only  be  reached  after  a 
knowledge  of  indisputable  facts  and  much  calm  reflection. 
He  is  making  an  investment,  which,  from  first  to  last,  will 
use  a  goodly  amount  of  money  and  time.  Suppose  that  he 
has  an  established  prestige  and  a  profitable  business  which 
has  been  in  successful  operation  for  years.  He  must  not 
jeopardize  it  for  an  experiment.  Of  course,  there  are  many 
cases  where  the  financial  statements  of  a  company*s  condi- 
tion show  a  profit  where  quite  the  reverse  is  true;  but  for 
argument's  sake,  let  us  assume  that  a  concern  is  prosperous 
and  has  been  "making  money"  for  a  majority  of  the  years 
it  has  been  in  existence.  That  fact  does  not  prove  that  it 
is  going  to  continue  to  do  so.  Present-day  business  condi- 
tions are  rapidly  changing.  Our  old  margins  of  profits  are 
disappearing.  New  factors  are  constantly  springing  up 
within  the  field  of  competition.  Today  it  is  a  new  tariff 
schedule,  tomorrow  a  wave  of  unrest  in  the  Labor  world. 
Furthermore,  we  are  getting  more  and  more  wasteful.  We 
have  enjoyed  too  much  prosperity.  Labor  gives  us  less 
work  per  hour,  paid  for  at  an  ever  increasing  price.  Why  ? 
We  have  grown  too  big  to  watch  the  small  details.  We 
have  grown  too  fast  to  take  the  time  to  train  skilled  help. 
We  have  lost  the  personal  touch  which  was  the  small  own- 
er's greatest  asset.  The  destructive  result  is  inefficiency; 
and  it  is  a  germ  which  continues  to  grow  and  multiply  until 
its  prevalence  ruins  a  company.  Only  drastic  measures  will 
eliminate  it. 

The  owner  must  consider  his  problem  dispassionately.  He 
is  facing  the  inevitable  if  his  competitors  grasp  at  the  solu- 
tion first.  What  is  the  answer?  It  can  be  found  by  those 
methods  which  develop  the  personal  touch,  grasp  of  detail, 
control  of  materials,  accurate  knowledge  of  all  the  variables 
afifecting  any  business  and  maximum  prosperity  through 
high  wages  for  the  rank  and  file. 


J 


FREDERIC  A.  PARKHURST 


45 


B.  That  this  answer  has  been  proved  can  be  established 
by  a  visit  to  many  plants  running  under  the  science  of  man- 
agement. There  are  enough  of  them  to  afford  ample  op- 
portunity for  the  study  of  its  workings  under  prevailing 
manufacturing  conditions.  They  are  old,  established  plants, 
prosperous  before  the  installation  of  such  methods,  but 
doubly  so  now.  That  does  not  necessarily  mean  a  doubling 
of  the  net  profits,  though  such  is  true  in  some  cases.  An 
increased  prosperity  is  realized  through  several  factors : 

(a)  Greater  profits. 

(b)  Satisfied  customers,  hence  more  staple  and  steady 
source  of  orders. 

(c)  Less  nomadic  and  better  satisfied  labor  due  to  higher 
wages  and  better  shop  conditions  which  results  in  an  absence 
of  labor  troubles. 

(d)  Ability  to  safely  and  intelligently  meet  fair  competi- 
tion through  efficient  manufacturing  methods  and  accurate 
cost  records. 

It  is  hoped  that  each  person  interested  will  verify  for  him- 
self the  conditions  existing  in  plants  running  under  scien- 
tific management.  A  day  spent  in  each,  of  several  so  or- 
ganized, would  be  of  advantage  to  any  owner.  Such  firms 
rather  invite  a  study  of  their  conditions.  The  owner  con- 
templating the  adoption  of  methods  founded  upon  the  prin- 
ciples of  scientific  management,  owes  to  himself  and  his 
associates  all  the  advantages  that  can  come  from  an  intelli- 
gent study  of  these  methods  in  actual  operation. 

C.  That  you  may  compare  the  ordinary  foundry  with  its 
possibilities  under  correct  methods,  let  me  draw  you  a  pic- 
ture of  a  foundry  as  it  actually  appears  under  such  methods. 
The  first  impression  one  receives  is  that  no  one,  from  the 
office  boy  to  the  laborer,  seems  in  a  hurry,  yet  each  is  busy. 
This  is  quite  contrary  to  imagined  conditions.  Though 
there  is  no  apparent  hurry,  each  one  has  plenty  to  do  and 
ever>^thing  is  moving  along  at  a  high  speed.  The  individual 
has  specific  duties,  and  his  written  instructions  cover  every 


46 


PUT   YOUR    HOUSE  IN    ORDER 


FREDERIC  A.  PARKHURST 


47 


detail  of  his  work.    He  makes  few  false  moves.    He  is  paid 
more  than  he  could  get  in  any  shop  run  under  old  lines. 

There  are  operations  being  performed  at  an  unheard  of 
speed.  For  example,  here  is  a  man  making  600  cores  per 
day  when  formerly  150  was  a  day's  production.  There  are 
90  crank  cases  a  day  from  one  pattern  that  the  best  foundry 
imd  pattern  shop  talent  said  could  not  exceed  40.  Castings 
are  poured  under  pyrometer  control,  material  taken  to  and 
from  the  men.  One  sees  specially  trained  men,  not  molders, 
pouring  difficult  molds  successfully. 

The  time  study  men  are  making  analyses  of  operations 
on  a  job  and  timing  each  with  a  stop  watch.  *  Do  the  men 
object?  They  did  at  first,  but  they  receive  a  bonus  of  25 
per  cent  of  their  wages  while  they  are  being  timed  and  they 
realize  that  when  the  correct  time  has  been  established  they 
make  more  money  on  that  job  because  of  the  bonus  attached. 

Now  let  us  look  at  the  indirect  elements  which  are  re- 
sponsible for  this  production  and  the  smooth  running  of 
the  shop.  Chief  of  these  is  the  planning  room,  or  "brains 
of  the  shop."  The  several  important  functional  men  em- 
ployed through  and  about  the  shop  are : 

1.  Production  clerk. 

2.  Route  clerk. 

3.  Order-of-work  clerk. 

4.  Schedule  clerk. 

5.  Time  study  foreman. 

6.  Material  foreman. 

The  planning  room  organization,  combined  with  their 
shop  representatives,  remove  much  of  the  detail  that  is  or- 
dinarily delegated  to  shop  foremen  and  gang  bosses.  The 
first  mentioned  few  men  are  specially  trained  to  several 
branches  of  the  work  necessary  to  the  official  operation  of 
a  plant.  They  are  all  specialists.  Their  duties  are  carefully 
defined  and  responsibility  for  every  detail  is  definitely 
placed. 


/ 


*  t* 


I 


Briefly,  the  work  of  the  planning  room  staff  is  as  follows : 

1.  The  production  clerk  is  the  head  of  the  planning 
room.  He  is  held  responsible  for  those  under  him  and  their 
work.  He  sees  to  the  proper  distribution  of  charges  of  all 
labor  routed  to  the  shops.  He  supervises  the  ordering  of 
material;  also  cost  and  stores  records  and  other  general 
details. 

2.  The  route  clerk  routes  all  work  to  the  shops  by  means 
of  work  orders  and  distributes  this  work  to  the  proper 
benches,  machines  or  men  by  means  of  the  planning  board, 
a  duplicate  of  part  of  which  is  in  each  department.  He  does 
not,  however,  have  anything  to  do  with  the  "order  of  work" 
or  of  the  records  of  its  condition  in  process. 

3.  The  order-of-work  clerk  is  responsible  for  the  cor- 
rect processing  of  all  work  in  the  shops  and  the  maintenance 
of  shipping  date  schedules.  He  plans  the  order  in  which 
operations  at  each  bench  or  machine  are  performed  so  as  to 
finally  bring  the  component  parts  of  the  work  for  each  order 
through  on  a  given  date. 

4.  The  schedule  clerk  keeps  the  process  schedule,  issues 
the  daily  schedule  and  job  tally  sheets  to  the  shop,  and  in 
conjunction  with  the  order-of-work  clerk  checks  and  follows 
up  details  of  work  in  process.  These  two  men  also  control 
the  orders  for  overtime  work  that  may  from  time  to  time 
be  necessary  to  maintain  shipping  promises. 

5.  The  shop  methods  are  controlled  by  the  time  study 
foreman.  He  is  responsible  for  the  time  study  work.  This 
includes  the  analysis  of  all  operations,  the  fixing  of 
times,  computation  of  bonus  and  the  instruction  of  the 
employees  until  they  can  meet  the  bonus  production 
called  for.  He  is  also  responsible  for  the  instruction  cards. 
These  cards  are  the  final  detail  record  of  the  standardized 
practice  as  finally  determined  after  the  study  of  conditions 
and  completion  of  time  studies. 

Part  of  the  times  are  covered  on  the  standard  time  sched- 
ule of  sub-elemental  operation  times.  These  times  apply 
to  all  jobs.    Only  a  few  of  the  operations  in  a  new  job  have 


48 


PUT    YOUR    HOUSE   IN    ORDER 


to  be  timed.  The  bonus  for  a  given  production  is  obtained 
directly  from  the  authors  standard  differential  bonus  sheets. 
These  sheets  show  the  bonus  figures  for  any  one  of  fifteen 
classes  of  labor  for  any  production. 

•  6.  The  material  foreman,  under  orders  from  the  planning 
room,  or  through  the  routing  si>ecified  on  the  work  orders, 
controls  the  movement  of  all  material  in  process.  This  ap- 
plies to  everything.  The  workmen  or  their  helpers  are  not 
allowed  to  go  after  the  material  they  are  to  use.  Neither 
are  they  allowed  to  deliver  it  to  the  next  destination  after 
they  are  through  with  their  part  of  the  work.  In  a  foundry 
this  applies  to  delivery  of  sand,  chills,  wire,  nails,  core 
plates,  flasks,  cores,  metal  (pouring  gang),  movement  of 
castings,  etc.  In  fact,  all  material  to  be  moved  is  in  charge 
of  the  material  foreman.  This  applies  from  the  time  it  is 
ready  to  move  the  first  time  until  it  has  reached  its  final 
destination. 

D.  It  can  be  readily  seen  that  the  division  of  responsibi- 
lities as  above  outlined  must  tend  to  much  greater  plant 
efficiency  of  operation  than  can  be  realized  by  holding  each 
foreman  responsible  for  his  part  of  all  these  things.  The 
development  of  an  organization  as  above  outlined  must  of 
course  impress  the  older  regime  as  more  or  less  radical. 
This  is  obvious.  At  the  same  time,  the  method  of  procedure 
affects  the  smoothness  of  operations  during  the  period  of 
transition.  The  responsibility  for  this  is  up  to  the  organiz- 
ing engineer. 

E.  We  come  now  to  the  selection  of  a  competent  en- 
gineer, expert  in  the  use  of  methods  based  upon  the  prin- 
ciples of  the  science  of  management.  He  should  be  a  man 
of  varied  shop  experience  and  have  a  thorough  knowledge 
of  business.  He  must  know  men  and  be  able  to  appreciate 
the  psychological  influence  in  dealing  with  them.  The  en- 
tire problem  is  one  of  education ;  and  success  can  only  be 
obtained  through  a  capacity  which  will  control  the  ever- 
varying  human  factor  while  the  new  order  is  being  estab- 
lished. 


' 


I 


i 


FREDERIC  A.   PARKHURST 


49 


F,  The  successful  issue  lies  with  the  engineer,  but  the 
management  must  support  his  authority  to  the  limit.  The 
owner  cannot  be  too  careful  in  the  choice  of  an  expert,  but 
once  a  choice  has  been  made,  stand  firmly  by  him.  The 
moral  effect  of  this  attitude  will  remove  half  the*  obstacles 
ordinarily  met. 

G.  The  element  of  time  is  the  essential  agent  which  pro- 
duces results.  The  length  of  time  required  to  put  any  given 
plant  on  a  sound  basis  of  efficiency  can  be  but  roughly  esti- 
mated. Each  plant  offers  its  own  problems  and  each  prob- 
lem must  be  met  and  disposed  of  according  to  varying  cir- 
cumstances. Many  indirect  influences  have  a  heavy  bearing 
upon  the  situation. 

As  a  general  proposition,  the  small  plant  will  require  at 
least  between  two  and  three  years.  The  larger  and  more 
complex  the  plant,  a  correspondingly  longer  time  is  neces- 
sary. What  three  years  would  do  for  one  concern  would 
take  six  to  do  in  another.  The  tendency  is  too  often  to  rush 
the  work.  Many  failures  have  resulted  from  just  this  cause. 
Owners  contemplating  the  installation  of  the  new  methods 
should  bear  this  in  mind  and  profit  by  the  experience  of 
those  who  have  been  successful  in  their  results.  Build  the 
foundations  slowly  if  need  be,  but  absolutely  surely. 

H.  We  have  contemplated  the  chief  points  to  be  consid- 
ered by  the  owner.  The  organizing  engineer  assumes  the 
larger  responsibility  when  he  undertakes  the  successful  re- 
organization of  any  plant.  He  should  make  a  careful  in- 
vestigation of  the  existing  executive  management,  the  offi- 
cial and  shop  personnel,  the  physical  plant  and  methods.  It 
is  not  safe  to  assume  that  because  a  plant  is  not  run  upon 
recognized  scientific  principles  that  it  is  inefficient.  If  this 
fact  is  overlooked,  the  organizer  may  find  a  condition  where 
his  services  are  not  needed  to  make  material  improvements. 

There  are  some  lines  of  business  which,  on  account  of 
their  simplicity  or  peculiarities,  can  be  little  improved.  In 
any  case,  conservative,  sane  and  explicit  information  as  to 
the  possibilities  should  be  given.     The  organizer  must  be 


( 


50 


PUT   YOUR    HOUSE   IN   ORDER 


sure  that  the  principals  thoroughly  understand  all  that  is 
involved  and  are  in  a  position  to  see  the  changes  carried  out. 

/.  When  a  complete  understanding  has  been  reached  with 
the  owners,  a  preliminary  report  should  be  submitted,  deal- 
ing with  the  unusual  conditions  or  glaring  inefficiencies. 
Immediate  attention  should  be  directed  to  such  and  a  remedy 
for  same  found  at  once.  By  prompt  recognition  of  such 
details,  not  only  may  large  savings  begin,  but  they  may 
make  the  installation  of  the  new  methods  pay  for  their 
own  expense. 

This  item  of  cost  is  in  many  cases  an  important  one.  A 
realization  of  the  fact  by  the  engineer  often  enables  him  to 
carry  on  the  work  on  a  scale  which  will  not  prove  a  burden 
to  his  client.  In  cases  where  the  ultimate  savings  are  doubt- 
ful, in  consideration  of  the  cost  of  the  change,  the  facts 
should  be  so  clearly  stated  that  a  misunderstanding  on  the 
part  of  the  client  would  be  impossible.  Such  cases  will  be 
rare.  In  most  cases  the  final,  direct  and  indirect  savings 
will  be  many  times  the  cost  of  installing  the  modem 
methods.  Furthermore,  the  gain  is  a  permanent  one  and 
the  return  will  be  felt  for  years. 

An  efficient  and  permanent  organization  is  as  much  if 
not  decidedly  more  of  an  asset  than  so  much  plant.  An- 
drew Carnegie  once  said  that  could  he  retain  his  organiza- 
tion, the  loss  of  his  plants  would  not  be  fatal:  he  could  in 
a  short  time  replace  the  latter  and  outstrip  his  competitors. 

7.  The  next  step  for  the  engineer  is  to  thoroughly  study 
the  available  human  material  and  plan  his  organization  to 
use  it.  In  a  plant  of  any  size  there  is  enough  material  to 
fill  all  requirements.  The  men  will  have  to  be  trained, 
tried  out,  shifted  and  tried  again.  It  will  be  the  exception 
who  is  not  finally  placed  satisfactorily.  A  great  asset  of 
the  old  employee  is  that  he  does  not  need  to  be  taught  the 
details  of  the  particular  business.  Other  requisites  being  at 
all  equal,  he  is  the  better  choice. 

The  organizer  must  exercise  extreme  care,  patience  and 
tact  in  establishing  the  new  line-up.    He  has  to  contend  with 


FREDERIC  A.   PARKHURST 


51 


\ 


petty  jealousies,  age,  term  of  services  and  similar  obvious 
conditions.  One  of  the  most  difficult  situations  is  the  neces- 
sity for  changing  the  incumbents  of  more  important  posi- 
tions. This  is  especially  so  in  cases  where  he  may  have  to 
put  a  man  into  a  place  of  less  importance,  but  which  he  is 
pre-eminently  fitted  to  fill. 

There  is  an  old  saying,  "A  new  broom  sweeps  clean,"  but 
the  writer  has  never  found  it  necessary  to  prove  the  adage. 
There  are  cases  where  one  is  obliged  to  remove  an  old  em- 
ployee, but  it  is  the  exception  rather  than  the  rule — if  the 
reorganization  is  carefully  planned  and  built  up. 

Just  here  a  word  about  the  organization  record  might 
not  be  amiss.  The  record  contains  a  complete  set  of  all 
instructions  covering  in  detail  the  duties  of  each  member 
of  the  organization.  A  new  incumbent  in  any  position  needs 
but  to  study  them  to  become  thoroughly  familiar  with  his 
duties.  Too  much  stress  cannot  be  laid  upon  the  importance 
of  these  records.  They  assure  the  maintenance  of  details 
and  routine  long  after  the  organizer  has  completed  his 
work.  They  are  an  asset  to  the  firm  because  they  show  how 
and  why  each  detail  is  handled  in  a  certain  w^ay.  No  man 
needs  miss  promotion  because  no  one  else  can  step  into  his 
job.  Neither  can  an  employee  "corner"  his  services  because 
he  alone  knows  his  particular  part  of  the  work  and  so  thinks 
he  is  indispensable.  Such  a  man  cannot  be  dispensed  with 
too  soon.  This  record  is  for  reference  of  all  department 
heads  and  they  are  invited  to  use  it  freely  to  familiarize 
themselves  with  the  new  order  as  the  work  progresses. 

K.  The  order  of  procedure  in  working  out  detail  in 
methods  depends  wholly  on  the  local  plant  conditions. 
There  can  be  no  hard  and  fast  rule.  Each  problem  must  be 
met  in  a  different  way.  No  two  plants  are  suffering  from 
exactly  the  same  measure  of  the  same  elements  of  ineffi- 
ciency. One  plant,  though  very  inefficient,  may  have  a 
highly  developed  stores  system.  Another  may  have  no 
stores  system  at  all.  One  plant  may  know  its  costs  and 
another  not.    A  congestion  of  orders  may  be  a  great  handi- 


52 


PUT    YOUR    HOUSE  IN    ORDER 


I 


! 


m 


cap  and  again  the  difficulty  lies  in  an  inability  to  get  ma- 
terial when  wanted.  All  these  combinations  have  to  be 
treated  as  they  occur.  Each  kind  of  business  offers  its  own 
likely  chances  for  inefficiency.  One  of  the  greatest  elements 
in  any  business  is  the  labor  proposition. 

No  matter  how  good  your  plant,  how  economical  your 
furnaces,  how  much  material  you  may  have,  the  man  is 
what  counts.  Plant,  furnaces,  materials!  Absolutely  use- 
less without  the  human  agency.  As  stated  before,  lalx)r  is 
giving  us  less  work  per  hour  for  a  steadily  increasing  wage. 
This  condition  is  going  to  grow  worse  for  some  time  to 
come.  The  reasons  are  too  well  known  to  need  discussion. 
We  must  consider  the  remedy. 

L.  "Put  your  house  in  order."  Build  up  an  adequate  and 
self-sustaining  organization.  No  iron-clad  system  and 
fixed  detail  of  method  can  be  generally  applied.  The  true 
science  of  management  lies  not  in  a  definite  set  of  forms  or 
?.  standard  line  of  procedure. 

The  fundamental  principles  remain  constant.  The  sys- 
tem, forms,  etc.,  are  but  a  means  to  an  end.  The  entire 
combination,  to  be  effective,  must  realize  certain  results. 
In  addition  to  a  self-sustaining  organization  supported  by 
written  instructions,  subject  to  revision  to  suit  ever-chang- 
ing conditions,  we  must  automatically  reward  each  employee 
for  work  well  and  efficiently  performed.  He  must  not  be 
left  to  his  own  devices.  All  the  elements  of  his  work  must 
be  under  absolute  control.  To  do  this  the  personal  factor 
must  be  recognized  as  paramount.  This  condition  can  be 
realized  by  fair  and  competent  management,  and  the  co- 
operation of  the  rank  and  file  will  be  obtained  permanently. 
Give  a  generous  bonus  in  addition  to  the  day  wage,  for  a 
good  day's  work  well  done.  You  will  have  a  better  satisfied 
and  higher  standard  of  employee.  Your  house  will  be  in 
order. 


1-A. 
1-B. 
1-C. 


LECTURE  V 


FIRST    ESSENTIALS 

Preliminary  Investigation. 
The  Form  of  Organization. 
The  Organization  Record. 


This  lecture  will  discuss  the  above  subjects,  following  closely 
Chapter  I  of  the  text.  Examples  of  experiences  with  other  plants  will 
also  be  brought  in  to  emphasize  important  points. 


53 


I, .  i 

i 


I 


I 


I'Vi 


2-A. 

2-P>. 
2-C. 


LECTURE  VI 


DEPARTMENTAL  FUNCTIONS 

Functions  of  the  Sales  Department  and  Counting  Room. 
Functions  of  the  Engineering  Room. 
Functions  of  the  Drafting  Room. 


This   lecture  will   treat   of   the   above   subjects,   closely    following 
Chapter  II  of  the  text. 


LECTURE  VII 


DRAFTING   ROOM    METHODS 

VII.    Drafting  Room  Instructions, 

VIII.     Instructions   for   Drawing  and    Sketch    Indexes. 
XXXI.    Shop  and  Drawing  Boys'  Instructions. 

This  lecture  will  discuss  the  several  instructions  referred  to  above, 
which  instructions  form  part  of  the  Appendix  of  the  text.  The  object 
of  reviewing  instructions  is  to  enable  the  student  to  understand  the 
way  in  which  instructions  are  drawn  up  in  detail  to  cover  the  functions 
of  certain  departments. 


54 


55 


Mi 


If' 


I'i! 

J' 


3-A. 
3-B. 
3-C. 
3-D. 


LECTURE  VIII 


PLANNING   ROOM 

Planning  Department. 
Duties  of  the  Superintendent. 
Functions  of  the  Planning  Department. 
The  Production  Clerk. 


1"^ 


The  above   subjects  will  be   discussed,   following  closely  part  of 
Chapter  III  of  the  text. 


i    i 


V  >"■ 


56 


LECTURE  IX 


PLANNING    ROOM    INSTRUCTIONS 

X.    Production  Clerk's  Instructions. 
XI.    Planning  Department  Monthly  Report. 


The   above   instructions   will  be   covered   in   detail,   following   the 
Appendix  of  the  text  for  the  instructions  mentioned. 


> 


57 


li  J 

m 


hi 


I 


fi$ 


'3 

i 


LECTURE  X 


PLANNING  ROOM  (contiiiued) 

3-E.  Thk  Shop  Engineer. 

3-F.  The  Stores  Clerk. 

3-G.  The  Cost  Clerk. 

3-H.  The  Route  Clerk. 

3-  I .  The  Order-of-Work   Clerk. 

3- J.  The  Shipping  Clerk. 

3-K.  The  Receiving  Clerk. 

3-L.  The  Time  Clerk. 

3-M.  The  Schedule  Clerk. 


The  above  subjects  will  be  discussed  in  continuance  of  the  de- 
scription of  the  detail  work  handled  by  different  functionaries  located 
in  the  planning  room,  or  working  in  conjunction  with  it.  This  lecture 
will  follow  that  part  of  Chapter  III  of  text  indicated  above. 


4' 


LECTURE  XI 


PLANNING  ROOM  (contiiiued) 

3-N.    The  Factory  Mail  System. 
3-0.    The  Time  Boy. 
3- P.    The  Inspector. 
3-Q.    The  Stores  Keeper. 
3-R.    The  Move  Material  Boss. 
XXXI.    Inspector's  Instructions. 


This  lecture  will  discuss  the  above  subjects,  completing  Chapter 
III  of  the  text  not  already  covered.  This  lecture  will  also  include  a 
discussion  of  Inspector's  Instructions  XXXI,  forming  part  of  Appen- 
dix of  the  text,  page  281. 


4\ 


58 


59 


'I  i 


I 


f 

. :''  1 


m 


\ 


4-A. 
4-B. 


LECTURE  XII 

ROUTING    AND    CONTROL   OF    WORK 

The  Routing  of  Work  Through  the  Shops. 
Symbols   (For  further  reference  see  "Symbols"  published  by 
the  author  in  early  1917). 


The   above   subjects   will   be   discussed,    following   closely   part   of 
•Chapter  IV  of  the  text. 


LECTURE  XIII 


ROUTING  AND  CONTROL  OF  WORK    (cOntinUCd) 

4-C.  The  Functions  of  the  Material  Boss. 

4-D.  The  Functions  of  the  Order-of-Work  Clerk. 

4-E.  Gang  Bosses. 

4-F.  The  Speed  Boss* 


This  lecture  will  complete  the  discussion  of  the  remaining  part  of 
Chapter  IV  of  the  text. 


60 


61 


|.;i  - 


m 


LECTURE  XIV 

ROUTING  AND  CONTROL  OF  WORK    (coiltinucd) 

XIV.    Anticipating  Requirements  both  as  to  Rough  Material, 

Machining  Operations  and  Assembly. 
XV.    Order-of-Work  Clerk's  Instructions. 
XVI.    Movement  of  Batches  in  Installments. 
XVI  r.    Route  Rack  Signals. 

This  lecture  will  be  confined  to  discussing  the  details   of   the  in- 
structions mentioned  above,  forming  part  of  the  Appendix  of  the  text. 


LECTURE  XV 


STORES,    LABOR   AND   COST 

5-A.  The  Creation  of  a  Stores  Department,  the  Methods  of 
Classifying  and  Housing  all  Material  (Rough  or  Fin- 
ished) not  in  Process  of  Manufacture,  and  the  Order- 
ing OF  Stores  either  to  be  Purchased  Elsewhere  or  to 
BE  Made  in  the  Shops. 

5-B.  The  Perpetual  Inventory  or  Stores  Ledger,  showing 
how  it  is  kept  up  to  date  and  checked  to  always  agree 
with  the  Actual  Stock. 

The  above  subjects  will  be  discussed  following  the  outline  as  given 
in  part  of  Chapter  V  of  the  text.  The  student  is  referred  to  the 
author's  "Predetermination  of  Prices"  for  a  further  insight  into  the 
controlling  elements  necessary   in  connection  with  costing. 


I 


62 


63 


LECTURE  XVI 

STORES^  LABOR  AND  COST  (continued) 
5-C.    The  Means  used  to  get  Correct  Returns  for  all  Times 

EXPENDED  on  WoRK,  WHETHER  AS  EXPENSE  OR  AS  PRODUCTIVE 

Labor,  including  Operation  Times. 

5-D.  The  Combined  Cost  and  Route  Sheet,  and  the  Methods 
Employed  to  Distribute  and  Collate  all  Material  and 
Labor  Charges  as  well  as  Overhead  Expense. 


This  lecture  will  complete  the  discussion  of  this  subject  as  out- 
lined in  Chapter  V  of  the  text. 


I*  ^ 

1 


I     ^ 


64 


LECTURE  XVII 

INDIRECT  COSTS 

4- A.  Expense  Symbols. 

4-B.  Expense  Distribution. 

4-C.  Distribution  of  Burden. 

4-D.  Erroneous  Methods  of  Distribution. 

4-E.  Differential  Process  Rate  Method. 

4-F.  Undistributed  Burden. 

The  above  subjects  are  treated  in  detail  and  reprinted  complete  from 
Chapter  IV  of  the  author's  "Predetermination  of  Prices."  Figures  re- 
ferred to  have  been  omitted  and  the  student  is  referred  to  the  above 
mentioned  book  for  further  information. 

INDIRECT  EXPENSE     . 

The  third  element  of  true  cost  presents  a  more  intricate 
problem  to  solve,  because  the  items  of  indirect  costs  are 
less  easy  to  determine  and  control  than  the  direct  items 
of  labor  and  material.  The  direct  items  are  incurred  by 
a  specific  job  and  charged  to  that  job,  but  the  indirect 
items  are  incidental  to  all  jobs  as  a  whole,  since  they  cover 
administrative,  financial,  sales  and  operating  outlay.  The 
majority  of  the  indirect  expense  must  remain  nearly  con- 
stant irrespective  of  the  volume  of  business.  A  small  part 
of  the  expense  is  a  variable  and  can  be  controlled  as  neces- 
sity arises.  To  separate  the  variable  or  partly  controllable 
factors  from  the  more  constant  factors,  it  is  essential  to 
make  a  comprehensive  analysis  of  all  indirect  expense. 
When  such  an  analysis  has  been  made  the  need  of  adopt- 
ing a  diflferential  process  rate  or  differential  burden  method 
of  distribution  will  be  obvious. 

4-A.  Expense  Symbols 

A  typical  expense  distribution  chart  is  shown  in  Fig. 
16.  The  figure  shows  a  chart  somewhat  amplified  and 
more  complete  than  the  ordinary  business  would  require. 
The  amplification  is  purposely  carried  out  to  make  the 
application  more  general  and  to  better  illustrate  the  method. 

65 


I 

J' I 

11-  '>. 
Ill  n 


66 


EXPENSE    SYMBOLS 


For  convenience,  a  typical  list  of  X  accounts,  showing  the 
subjects  they  cover,  is  given.  The  following  X  symbols 
should  only  be  used  in  combination  with  the  plant  symbol 
A,  B,  C,  etc.,  or  a  department  symbol  lA  to  IZ.  (See 
Fig.  15.) 

XI.  Salary  of  managers,   superintendents,  department 
heads. 

X2.  Clerical  wages. 

X3.  Other  labor. 

X4.  Supplies. 

X5.  Maintenance  of  buildings  and  stnictures. 

XO.   Maintenance  of  equipment,  furniture  and  fixtures. 

Subdivided  by  machines,  etc.     (See  Table  I.) 
X7.  Care  of  plant  (AX7)  or  department  indicated. 
X8.  Miscellaneous  expense,  not  supplies. 
X9.  Miscellaneous  small  tool  expense. 
XIO.  Experimental  and  test  expense. 

Xll.  Fuel. 

X12.  Maintenance  of  electrical  equipment. 
X13.  -Maintenance  of  air  compressors  and  piping. 
X14.  Maintenance  of  boiler,  stacks  and  accessories. 
X15.  Maintenance  of  steam  and  water  piping  outside  of 
boiler  and  engine  room. 

X16.   Maintenance  of  oil  pumps. 

X17.   Maintenance  of  heating  system. 

XI 8.  Advertising. 

X19.  Traveling  expense. 

X20.  Maintenance  of  motor  cars  and  trucks. 

X21.  Pattern  and  flask  expense. 
X22.  Sand. 

X23.  Injuries  to  employees. 
X24.  Acetylene  expense. 
X25.  Inventory  expense. 


FREDERIC    A.    PARKHURST  6j 

X26.  Crucibles  and  pots. 

X27.  Replacement  of  stock  chills. 

X28.  Electricity  purchased  outside. 

X29.  Gas. 

X30.  Freight  and  express. 

X31.  Defective  material  and  workmanship,  and  main- 

tenace  of  contracts. 
X32.  All  bad  work  expense  not  belonging  to  X31. 
X33.  To  X49  inclusive  may  be  used  to  cover  any  specific 

needs  of  a  business. 
X51.  Legal  expense. 
X52.   Insurance. 
X53.  Taxes. 
X54.  Depreciation. 
X55.  Interest. 
X56.  Oxidation. 


Each  of 
these  groups 
have  numbered 
items  similar 
to  XI  to  X56 
inclusive. 


General  Expense 

GAX.  General  administrative  expense.  ' 
GBX.  General  sales  expense. 
GCX.  General  comptrollers  and  fi- 
nance expense. 
GLX.  General  lalx)ratory  expense. 
GOX.  General  operating  expense. 
GPX.  General  purchasing  expense. 

It  should  be  noted  that  X32,  bad  work  expense,  may 
include  bad  accounts  under  GCX32  and  unearned  burden 
under  GBX32.  This  list  is  only  typical  and  suggestive. 
The  division  of  the  burden  should  be  sufficiently  complete 
to  cover  all  of  the  divisions  of  expenses  desired.  Always 
use  one  sequence  of  symbols.  To  properly  summarize  ex- 
pense, we  must  be  able  to  show  the  different  symbols  at 
the  left  of  the  sheet  and  in  each  department  column  to  the 
right  interpolate  figures  that  apply  to  each  department  and 
for  each  expense  symbol.  Each  X  symbol  means  the  same 
thing  all  the  way  across  the  sheet.  Many  departments  \y\\\ 
use  only  a  few^  of  these  numbers,  while  others  will  use  j^er- 
haps  half  or  more. 


68 


DISTRIBUTION    OF    BURDEN 


4-B  Expense  Distribution 


Cost  sheets  are  opened  for  each  department.  Each  col- 
umn of  each  department's  set  of  sheets  is  devoted  to  the 
X  symbol  used  by  that  department.  The  end  of  the  month 
the  sum  of  these  sheets  drawn  off  by  X  numbers  is  posted 
to  the  indirect  expense  symbol  summary  sheet  illustrated 
in  Fig.  15. 

The  vertical  footings  of  the  indirect  expense  symbol  sum- 
mary sheet  represent  the  total  indirect  expenditures  for  each 
department  for  the  month.  The  cross  additions  of  each 
X  account  represents  the  total  expense  for  each  X  sym- 
bol for  each  month.  The  vertical  footing  of  the  extreme 
right-hand  total  column  must  agree  with  the  cross-footing 
of  the  totals  at  the  bottom  of  the  sheet. 

From  the  analysis  sheet  above  described  (Fig.  15)  the 
total  departmental  expense  for  each  period,  weekly,  monthly, 
quarterly  or  yearly,  is  determined.  It  is  not  sufficient,  how- 
ever, to  prorate  these  departmental  total  expenses  by  means 
of  a  burden  without  separating  or  further  distributing  item 
X6  (Maintenance  of  Equipment).  It  is  possible  that  in  cer- 
tain kinds  of  business  or  in  a  plant  having  but  little  machin- 
ery, or  perhaps  apparatus  of  but  one  size  or  type  and  costing 
approximately  the  same,  the  sum  total  of  the  departmental 
expenses  w^ould  give  a  distribution  close  enough.  This  con- 
dition does  not  ordinarily  obtain,  however,  so  it  becomes 
necessary  to  separate  the  equipment  burden,  and  recognize 
the  w  ide  range  in  the  cost  of  operation  and  expense  incident 
to  the  various  tools  and  apparatus. 

Each  piece  of  machinery,  equipment  or  w^ork  point  should 
have  its  individual  burden  or  differential  process  rate  deter- 
mined as  in  4-D. 

4-C.  Distribution  of  Burden 

Table  I  illustrates  equipment  expense  summarized  by 
months  and  covering  one  year.  The  amounts  opposite  each 
machine  symbol  represent  the  total  monthly  equipment 
charge  made  up  of  the  items  listed  in  the  preceding  para- 
graph, plus  X6  expense  charges.    These  totals,  divided  by 


I 


FREDERIC    A.    PARK  HURST 


69 


the  nominal  number  of  hours  for  each  machine,  represent 
the  machine  rate  or  burden.  This  nominal  rate  is  determined 
by  assuming  that  each  machine  should  operate  on  a  fair  aver- 
age basis  of  so  many  hours  per  month  or  year.  The  class  of 
business,  of  course,  governs  how  this  is  determined.  Let  us 
take  for  example  a  plant  running  one  shift  of  10  hours, 
based  on  300  working  days  per  year.  The  normal  full 
working  capacity  would  then  be  equivalent  to  3000  machine 
hours  per  year  per  machine.  It  cannot,  of  course,  be  fig- 
ured that  on  an  average  each  machine  will  work  the  full 
3000  hours.  The  records  of  the  business  will  indicate  what 
per  cent  is  a  fair  figure  to  use,  in  determining  how  many 
hours  to  divide  for  each  month  into  the  total  machine  ex- 
pense, to  determine  the  machine  burden  per  hour.  The 
same  basis  is  used  w^here  a  plant  nms  24  hours  divided  into 
several  shifts. 

On  a  basis  of  3000  hours  maximum  per  year,  or  250 
hours  per  month,  we  can  assume  for  illustration  that  each 
machine  should  average  an  operating  time  of  80%  or  200 
hours  per  month.  This  200  hours  divided  into  the  total 
machine  expense  (see  4-B)  represents  the  machine  hourly 
burden. 

It  may  be  well  to  mention  at  this  point  that  in  the  event 
any  or  all  of  the  machines  are  working  their  full  allotted 
time,  the  actual  direct  hours  can  be  divided  into  the  expense 
for  that  period.  Some  firms  make  no  allowance  for  less 
than  100%  capacity,  but  use  the  full  number  of  yearly  hours 
as  a  basis.  On  the  other  hand,  if  the  machines  operate 
less  than  the  fair  average  amount  of  time,  we  cannot  use  a 
higher  burden  by  dividing  each  month's  cost  by  a  greatly 
reduced  number  of  hours.  If  this  is  done,  the  result  will 
be  an  excessive  burden  per  hour.  It  is  not  necessary,  of 
course,  to  always  figure  the  80%  or  full  running  time  used 
in  the  example  above.  Some  classes  of  equipment  or  some 
kinds  of  business  might  make  it  desirable  to  use  a  some- 
what smaller  percentage,  and  vice  versa.  In  the  event, 
however,  that  only  half  of  the  accepted  percentage  was  run 
on  a  machine,  or  a  lot  of  machines  for  a  period,  it  would 


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FREDERIC    A.    PARKHURST 


75 


not  be  fair  to  charge  against  cost,  double  the  amount  of 
burden.  The  disposition  of  undistributed  (or  unearned) 
burden  is  discussed  in  4-F. 

The  Hmiting  of  the  machine  hour  burden  or  other  burden 
rates  to  a  maximum  amount,  which  must  not  be  exceeded, 
applies  equally  to  departmental  or  other  burden  distribution. 
In  the  event  that  a  plant  is  running  very  slack  and  pro- 
ducing large  amounts  of  stock,  the  use  of  the  actual  burden, 
for  low  capacity,  would  result  in  an  excessive  cost  and  a 
false  inventory  value.  It  is  not  fair  or  equitable  to  use  fig- 
ures so  obtained  as  part  of  the  inventory.  If  the  undis- 
tributed burden  is  of  such  proportion  that  it  offsets  the 
profit  on  the  amount  of  work  done  for  the  period,  it  is  en- 
tirely a  general  business  loss  and  one  which  the  writer  con- 
tends should  ordinarily  be  shown  as  a  sales  expense.  In 
making  such  a  statement,  it  is  realized  that  general  condi- 
tions would  have  to  be  taken  into  consideration  and  allow- 
ances made  for  "seasonable"  variation  in  sales,  spirit  of  the 
times,  etc 

When  the  burden  chargeable  to  machines  has  been  de- 
ducted, the  balance  of  the  departmental  expense  must  be 
distributed  on  a  basis  of  so  much  per  direct  hour.  This 
is  determined  by  dividing  the  direct  hours  departmentally, 
as  shown  by  the  operating  statement,  into  the  indirect  ex- 
pense, after  substracting  that  part  prorated  as  a  process  rate 
or  pound  burden  (as  some  foundry  departments  should  be 
prorated).  These  burdens,  except  the  pound  burden,  should 
all  be  distributed  on  a  productive  hour  basis. 

Occasionally  one  will  find  departments  which  will  require 
a  still  different  basis  of  prorating.  For  example,  in  a  foun- 
dry where  certain  of  the  department  expenses  and  costs  of 
operation  are  directly  in  proportion  to  the  weight  handled, 
such  departmental  expenses  must  be  prorated  on  the  pound 
burden  basis.  Other  foundry  indirect  expense,  however, 
should  be  prorated  at  so  much  per  direct  hour.  A  complete 
operation  anlysis  makes  such  facts  evident  at  a  glance,  and 
the  indirect  expense  can  be  separated  both  by  items  and 
departments,  so  as  to  isolate  those  which  must  be  distributed 


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76 


DISTRIBUTION    OF    BURDEN 


by  one  method  from  those  which  must  be  distributed  b; 
another  method.  It  is  axiomatic  that  no  one  method  can 
give  correct  results  in  a  business  of  any  size,  where  one  has 
a  great  variety  of  product  or  has  several  departments  and 
a  variety  of  equipment. 

After  the  indirect  expense  distribution  has  been  worked 
out  to  show  the  actual  amount  of  money  for  each  depart- 
ment prorated  against  each  order  group,  these  amounts 
should  be  posted  to  the  operating  statement  (Fig.  16). 
Each  order  group  should  also  show  departmentally  the  bur- 
den rate  figured  for  the  period.  All  of  these  figures  appear 
in  the  third  section  of  the  operating  statement  entitled  **In- 
direct  Expenses."  Fig.  16  does  not  show  the  various  rates 
of  burdens  for  want  of  space.  It  should  be  understood, 
however,  that  the  differential  process  rate  is  the  correct 
method  to  use.  Under  each  order  group  there  may,  and 
probably  will  be,  several  burden  rates.  These  should  be 
expressed  as  departmental  hourly  burden,  or  process  rate 
burden,  or  pound  burden  rate,  or  possibly  a  general  expense 
burden  rate  and  a  sales  expense  burden  rate.  Ordinarily 
the  writer  believes  in  including  the  general  and  sales  ex- 
pense in  the  total  departmental  burden,  so  as  to  have  as  few 
rates  as  possible.  All  of  the  several  hourly  burden  rates 
may  be  added  to  the  machine  burden  rate,  or  process  rate, 
to  get  one  total  hourly  burden  rate  for  each  machine  or 
process  point.  Any  pound  or  piece  burden  rate  would,  of 
course,  remain  separate. 

In  distributing  burden,  the  orders  (F)  covering  l)etter- 
ments  and  additions  to  factory,  land,  etc.,  and  the  orders 
(P)  covering  additions  and  betterment  to  plant  equipment 
each  carry  their  proportion  of  burden.  It  should  be  borne 
in  mind  that  work  on  these  order  groups  should  be  con- 
sidered productive,  or  direct  labor,  as  far  as  the  depart- 
ments are  concerned  that  do  the  work.  They  should  carry 
their  burden  just  as  though  they  were  made  on  an  order 
chargeable  to  a  customer.  It  is  sometimes  desirable,  how- 
ever, to  use  a  burden  rate  which  does  not  include  the  mini- 
mum profit  factor  for  the  F  and  P  orders,  so  as  to  hold 


I 


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/ 


FREDERIC    A.    PARKHURST 


77 


down  the  increase  in  the  property  account  and  not  show  an 
excessive  asset.  After  deducting  any  burden  so  prorated  to 
the  F  and  P  orders,  the  remainder  of  the  departmental 
burden  is  apportioned  to  the  main  order  groups. 

When  the  amounts  covering  the  indirect  expense  pro- 
rated to  the  various  order  groups,  departmentally,  have  been 
distributed,  these  total  amounts  are  carried  out  to  the  A, 
B,  etc.  order  totals  column  (see  Fig.  16)  to  the  right;  and 
into  the  grand  total  column  at  the  extreme  right  of  the 
operating  statement.  The  grand  total  indirect  expense 
transposed  into  the  bracket  at  the  right  completes  the  second 
and  last  main  item  to  compose  true  costs.  The  sum  of  the 
direct  cost  plus  the  sum  of  indirect  costs  equals  true  costs, 
and  balance  with  the  control  accounts  indentified  by  depart- 
ment symbols.  To  summarize:  The  department  expense 
sheet,  with  a  column  devoted  to  each  expense  symbol  affect- 
ing that  department,  gives  the  summary  per  month.  This 
summary  is  prepared  so  as  to  get  departmental,  machine, 
process  and  pound  burden  amounts  of  expense  so  that  the 
differential  process  rates  can  be  determined  for  that  period. 
To  repeat,  for  emphasis,  these  rates  must  be  determined 
by  using  as  a  basis  a  fair  number  of  productive  hours  for 
the  period  based  on  the  plant  conditions.  Rates  beyond  this 
fair  average  must  not  be  used  if  excessive,  thus  giving  a 
false  cost.  An  undistributed  burden  should  be  considered 
a  sales  department  expense.  The  sum  of  the  different  de- 
partmental burdens  represent  one  total  amount  (in  dollars 
and  cents)  for  the  period.  This  amount  is  itemized  by 
order  groups  and  appears  as  a  summarized  distribution  on 
the  operating  statement  (Fig.  16). 

4-D.  Erroneous  Methods  of  Distributing  Indirect 

Expense 

The  most  common  methods  of  distributing  burden  are 
by  percentage,  by  flat  hourly  rate  or  by  straight  pound 
rate  as  used  in  the  average  foundry.  The  percentage  basis 
of  distribution  is  perhaps  one  of  the  most  common,  and 
also  one  of  the  most  unreliable  methods  possible  to  con- 
ceive.   For  argument's  sake,  assume  that  a  burden  fixed  on 


I 


78 


DISTRIBUTING    INDIRECT    EXPENSE 


the  percentage  basis  is  100%  of  the  direct  wages,  then  a 
distribution  of  6  cents  per  hour  burden  to  a  6-cent  appren- 
tice is  made,  a  burden  of  20  cents  an  hour  to  a  20-cent  man 
or  40  cents  an  hour  to  a  40-cent  man.  The  true  facts  of 
the  case  show  that  it  costs  fully  as  much  for  floor  space, 
heat,  light  and  superintending  for  the  apprentice  as  for  the 
20-cent,  30-cent  or  40-cent  man.  The  cost  of  supervision, 
wear  and  tear  on  tools  and  other  equipment  is  probably 
more  in  fact  for  the  low-priced  help  than  it  is  for  the 
higher  paid  journeyman  or  skilled  workman.  On  a  per- 
centage basis,  the  apprentice  boy's  work  bears  only  a  small 
part  of  the  burden  which  he  actually  incurs,  while  the  40 
cents  an  hour  skilled  workman's  job  is  being  charged  with 
more  of  the  burden  than  he  incurs.  The  percentage  basis 
of  distribution  takes  no  cognizance  of  the  machine  hour 
rate,  which  distributes  a  few  cents  an  hour  on  an  inexpen- 
sive tool  and  possibly  a  dollar  or  two  on  large  tools.  With 
this  variable  undivided,  the  percentage  distribution  is  fur- 
ther thrown  out  of  balance,  so  that  any  figures  obtained  by 
the  use  of  percentages  are  most  unreliable. 

To  further  illustrate  the  argument,  assume  that  a  burden 
of  100%  is  what  the  percentage  figures  show,  which  means 
that  for  the  various  rates  mentioned,  the  following  cost, 
exclusive  of  material,  exists. 


$.06  per  Hour   $.30  per  Hour   $.40  per  Hour 


10  hours $  .60 

100%  burden 60 

Total    $1.20 


$3.00 
3.00 

$6.00 


$4.00 
4.00 

$8.00 


Another  erroneous  method  of  distribution  is  the  blanket 
rate  based  on  productive  hours.  Here  is  an  error  not  so 
glaring  as  the  percentage  basis,  but  one  which  also  fails  to 
take  into  consideration  the  variance  of  the  burden  due  to 
the  diflferent  equipment  involved.  Neither  does  it  take  into 
consideration  the  fact  that  part  of  the  burden  should  be 
distributed  on  one  basis  and  part  on  another  basis.     Using 


f 


FREDERIC    A.    PARKHURST 


79 


the  same  examples  as  given  above,  but  prorating  at  say  30 
cents  per  hour  burden,  the  result  shows  below. 


$.06  per  Hour 

10  hours    $  .60 

Burden  at  $.30 3.00 

Total    $3.60 


$.30  per  Hour      $.40  per  Hour 


$3.00 

3.00 
$6.00 


$4.00 
3.00 

$7.00 


The  wide  difference  in  the  costs,  exclusive  of  material, 
shown  by  the  tw^o  preceding  sets  of  examples  illustrates 
that  there  is  something  radically  wrong  with  one  method, 
at  least.  Now  let  us  assume  the  three  conditions  under  the 
method  of  distribution,  being  described  herein.  A  correct 
departmental  burden  and  a  machine  hourly  burden  have 
been  determined  by  analysis.  Assume  further  that  the  de- 
partmental burden  is  12  cents  per  hour  and  that  the  work 
is  being  done  on  a  machine  with  a  burden  of  40  cents  per 
hour,  a  cost  comparison  would  stand  as  follows : 


$.06  per  Man 

10  hours  labor $  .60 

10  hours  machine  rate 4.00 

10  hours  dept.  rate 1 .20 

Total    $5.80 


$.30  per  Man        $.40  per  Man 


$3.00 
4.00 
1.20 

$8.20 


$4.00 
4.00 
1.20 

$9.20 


In  considering  the  last  problem,  it  should  be  borne  in 
mind  that  the  department  is  operating  while  the  job  is 
being  processed ;  likewise,  the  machine  time  shows  that  the 
departmental  and  machine  rate  for  the  same  number  of 
hours  spent  on  that  job  must  of  necessity  be  the  same 
whether  the  job  is  done  by  a  6-cent,  3a-cent  or  40-cent  an 
hour  man.  Of  course,  under  the  best  type  of  manage- 
ment, a  40-cent  man  is  not  put  on  a  6-cents-an-hour  job,  or 
vice  versa,  under  usual  conditions.  Any  concern,  however, 
employing  a  large  number  of  men  is  likely  to  find  during 
periods  of  business  depression  that  it  is  necessary  to  use 
a  higher  priced  man  on  work  requiring  less  skilled  labor,  in 


8o 


DISTRIBUTING    INDIRECT    EXPENSE 


•II 


ii 


order  to  keep  the  man  employed.  In  many  such  cases  the 
labor  charged  to  the  job  is  charged  at  the  rate  which  the 
grade  of  work  demands.  The  balance  of  the  man's  rate  is 
charged  to  the  department. 

In  contrast  to  the  necessity  quoted,  the  opposite  one 
sometimes  arises,  where  lack  of  labor  of  a  sufficiently  skilled 
type  makes  it  imperative  to  use,  say,  a  30cent  man  on  a 
grade  of  work  ordinarily  requiring  a  40-cent  man.  In  such 
cases  the  job  is  charged  with  labor  at  the  rate  of  30  cents 
and  the  man,  while  working  on  that  job,  receives  a  bonus 
charted  from  the  class  in  which  the  40-cent  man  would 
stand,  thus  receiving  added  remuneration  because  of  the 
higher  class  work.  When  the  man  goes  back  to  his  usual 
grade,  his  bonus  returns  to  its  usual  class.  Neither  diver- 
gence from  the  ideal  point  of  standardization  is  desired,  but 
may  prove  valuable  in  keeping  intact  an  organization  under 
trying  conditions. 

To  further  illustrate  the  discrepancy  which  will  be  seen 
between  costs  figured  with  a  dififerential  burden  divided  to 
obtain  true  results,  let  us  assume  a  job  taking  10  hours' 
labor  and  done  on  different  machines  with  their  individual 
process  rate  burdens. 


1st    example : 
$.10    per    hr, 
mach.  burden 

2nd  example : 
$.25    per    hr. 
mach.  burden 

3rd   example : 
$1.50   per   hr. 
mach.  burden 


Labor  $.30  per  hour;  $.12  per  hour  Dept.  burden 
-f  $.12  per  hr.  Dept.  burden-!-$.30  labor=$  .52  per  hr. 

+$.12  per  hr.  Dept.  burden+$.30  labor=$  .67  per  hr. 

f  $.12  per  hr.  Dept.  burden4-$.30  labor=i$1.92  per  hr. 
SUMMARY 


1st  Example 

10  hours $3.00 

$.12  Dept.  burden  1.20 

Machine  burden   1 .00 

Total    $5.20 


2nd  Example       3rd  Example 


$3.00 
1.20 
2.50 

$6.70 


$  3.00 

1.20 

15.00 

$19.20 


FREDERIC    A.    PARKHURST 


81 


A  comparison  of  these  figures  w^ith  the  preceding  ex- 
amples will  show  w^ithout  any  argument  that  an  error  must 
exist  somewhere.  Not  only  does  the  blanket  or  percentage 
method  give  us  a  cost  which  is  not  a  true  cost,  but  it  seri- 
ously affects  quotations  and  selling  prices,  so  that  there 
can  be  no  intelligent  control  of  these.  Furthermore,  the 
small  job  is  carrying  a  large  amount  of  burden  which  be- 
longs to  the  larger  job  run  in  large  or  powerful  machines, 
while  the  jobs  processed  in  these  large  machines  do  not 
begin  to  carry  the  burden  that  properly  belongs  to  them. 
(See  Fig.  17.) 

To  illustrate  how  an  hourly  and  pound  burden  is  used 
in  figuring  costs,  let  us  assume  a  job  requiring  a  total  of 
30  direct  hours  (molding,  core  making,  trimming,  etc.) 
and  weighing  80  lbs.,  another  weighing  200  lbs.,  and  another 
that  nets  1000  lbs.  of  good  castings  all  for  30  hours  direct 
labor. 

12  3 

80  Lbs.  200  Lbs.  1000  Lbs. 

Labor   $9.00  $9.00  $9.00 

Average  hour  burden  $.60...       18.00  18.00  18.00 

Pound  burden  at  $.03 2.40  6.00  30.00 

Total    $29.40  $33.00  $57.00 

or  cost  per  lb. 
exclusive  of  metal $.3675  $  .165  $  .057 

Study  of  the  above  example  will  readily  convince  the 
reader  that  such  a  basis  of  figuring  readily  shows  up  the 
good  job  from  the  poor.  Prices  can  be  intelligently  and 
confidently  fixed.  Oxidation  and  shrinkage,  fuel,  defective 
loss,  etc.,  melting,  handling,  pouring,  shipping,  trucking, 
etc.,  are  "pound"  items.  All  other  items  come  under 
hourly  burden  expense.  A  job  without  cores  takes  no  core 
or  "knocking  out"  burden.  Why  charge  them  with  any? 
The  use  of  this  differential  hourly  and  pound  burden  for 
foundry  work  is  the  key  to  correct  costs  for  that  class  of 
work,  as  it  is  for  other  trades.  If  the  class  of  work  in  a 
shop  changes  overnight,  as  it  often  does  in  the  jobbing  busi- 


w 


82 


DISTRIBUTING    INDIRECT    EXPENSE 


ness,  the  cost  distributed  to  jobs  automatically  takes  care 
of  itself.  Under  the  flat-rate  or  percentage  method  this 
condition  does  not  stand. 

So  far  general  overhead  as  burden  has  not  been  specifi- 
cally considered,  but  it  has  been  assumed  as  added  to  the 
departmental  burden  so  as  not  to  confuse  the  average 
reader.  Refer  to  Fig.  17.  This  diagram  is  based  on  ap- 
proximate figures.  The  same  basis  of  figuring  is  main- 
tained throughout.  The  curves  are  based  on  the  assump- 
tion that  the  problem  is  confined  to  one  department  carry- 
ing a  definite  departmental  burden  per  hour.  The  burden, 
of  course,  includes  miscellaneous  department  expense,  fore- 
manship,  general  sales,  administrative  expense,  etc.  To  the 
department  burden  has  been  added  a  machine  hour  burden 
figured  on  equipment  ranging  in  value  from  $100.00  up  to 
$8000.00.  Each  machine  burden  includes  interest,  depre- 
ciation, power,  maintenance  expense  and  its  proportion  of 
the  departmental  expense  that  can  be  prorated  to  it,  based 
on  the  proportion  of  heat,  light,  floor  space,  etc.,  allotted 
to  each  machine  plus  the  wages  of  the  operator.  The  wage 
used  starts  at  $1.80  per  day  for  productive  labor  working 
without  machine  equipment  or  with  equipment  up  to  the 
value  of  $100.00.  This  direct  labor  wage  also  includes 
an  allowance  for  bonus.  Bonus  is  charged  as  a  direct  item 
(including  the  foreman's  bonus,  which  is  paid  on  a  per- 
centage basis  depending  on  what  the  men  earn  on  each 
job).  The  direct  labor  rate,  which  starts  at  $1.80  per  day, 
including  bonus,  increases  as  higher  priced  equipment  is 
brought  into  use  up  to  $4.40  per  day,  including  bonus,  for 
the  $8000.00  unit. 

The  problem  illustrated  in  Fig.  17  is  figured  on  the  as- 
sumption that  there  is  but  one  machine,  or  process  point, 
for  each  of  the  unit  valuations  shown  on  the  diagram  for 
that  department.  The  figures  above  mentioned  are  repre- 
sented bv  the  curve  marked  "true  cost  line  based  on  differ- 
ential  burden  method." 

Assuming  that  the  true  cost  line  (Fig.  17)  represents 
one  day's  work  for  each  unit,  the  sum  total  of  these  vari- 


FREDERIC    A.    PARKHURST 


83 


ous  amounts  will  equal  the  total  expenditure  for  running 
the  department  for  one  day  of  ten  hours.  This  amount  di- 
vided into  the  productive  hours  represented  (work  units 
times  10)  will  give  the  average  rate  per  productive  hour. 
This  is  the  flat-rate-per-hour  figure  often  used  and  is  repre- 
sented on  the  diagram  (Fig.  17)  by  the  straight  horizontal 
line.  The  shaded  area  to  the  left  of  the  point  where  the 
horizontal  line  crosses  the  true-cost  line  represents  an  ex- 
cessive false  cost.  In  other  words,  labor  performed  in  a 
department  using  low-priced  men  and  operating  low-priced 
equipment  carries  two  or  three  times  the  burden  that  it 
should.  As  the  valuation  of  the  equipment  used  by  each  in- 
dividual increases,  the  difference  between  the  false  cost  ob- 
tained by  the  flat-rate-per-hour  method  and  the  differential 
burden  method  becomes  gradually  less.  At  a  certain  point 
the  flat-rate  burden  line  crosses  the  true-cost  line.  At  the 
point  of  coincidence  we  gtt  the  same  cost  for  each  of  the 
two  methods  illustrated,  providing,  of  course,  that  the  ratio 
of  productive  hours  is  the  same  for  each  work  unit. 

The  moment  we  pass  by  the  point  of  intersection  of  the 
flat-rate-per-hour  burden  line  with  the  differential  burden 
line,  the  shaded  area  represents  the  minus  and  false  cost 
obtained  by  the  flat-rate-per-hour  method.  In  other  words, 
at  this  point  the  flat-rate  method  does  not  distribute  enough 
burden  to  work  being  done  on  the  higher  priced  machines 
or  equipment.  Such  class  of  work  shows  a  cost  which  is  too 
low,  figured  on  the  flat-rate-per-hour-method,  just  as  the 
other  class  of  work  to  the  left  of  the  diagram  shows  a 
figure  too  high. 

Under  the  differential  process  rate  method,  the  burden 
per  hour  changes  with  the  valuations  of  the  equipment, 
increased  wage,  interest,  depreciation,  power,  maintenance 
charges,  etc.  The  expense  of  operation  is  distributed  in 
proportion  to  the  operating  cost  of  equipment  necessary  to 
turn  out  a  given  job.  The  basis  of  figuring  cost  should  be 
one  which  will  allow  one  manufacturer  making  certain  parts 
to  intelligently  compare  with  another,  equipped  to  do  the 
same,  his  costs  or  estimates.     A  method  of  figuring  cost. 


84 


DISTRIBUTING    INDIRECT    EXPENSE 


which  will  take  into  consideration  all  of  the  elements  in- 
volved in  turning  out  a  given  product,  will  mean  something 
as  a  cost  comparison. 

Another  direct  effect  of  incomplete  cost  methods  or  incor- 
rect methods  of  distributing  burden  results  in  a  great  many 
firms  being  unable  to  determine  whether  they  should  man- 
ufacture their  own  product  or  whether  they  should  purchase 
it  outside.  There  is  no  gainsaying  the  fact  that  a  firm 
equipped  for  and  experienced  in  the  manufacture  of  certain 
products  should  be  able  to  turn  out  that  product  at  a  cost 
cheaper  than  one  could  do  who  is  not  familiar  with  special- 
ization in  that  given  line.  Compare  the  cost  of  the  specialist 
making  certain  kinds  of  product,  figured  on  the  flat-rate-per- 
hour  burden,  with  costs  consuming  the  same  amount  of  time 
as  shown  by  the  shop  making  the  same  product,  but  not 
equipped  or  specializing  in  that  line,  and  still  using  a  flat- 
rate-per-hour  method.  It  will  be  found  there  is  a  great  dif- 
ference in  cost.  The  reason  for  this  difference  is  that  the 
manufacturer  specializing  in  a  certain  class  of  work  is 
equipped  for  it  and  his  department  does  not  carry  the  wide 
range  of  equipment  that  the  other  plant  which  does  not 
specialize  has  to  carry.  Though  their  methods  of  figuring 
the  flat-rate  burden  may  be  the  same,  still  the  specialist 
equipped  for  that  class  of  work  will  not  have  the  wide  vari- 
ation between  his  costs  and  the  true  costs  that  would  be 
found  in  the  other  department.  Though  his  flat-rate-per- 
hour  burden  method  is  incorrect,  still  for  his  class  of  work 
it  will  average  closer  than  will  the  same  method  used  by  the 
manufacturer  who  turns  out  a  large  range  of  product  rather 
than  a  special  or  limited  line. 

4-E.  Differential  Process  Rate  Method 

The  wide  difference  in  cost,  obtained  even  by  the  same 
method  in  different  plants,  will  well  emphasize  the  impor- 
tance of  having  a  differential  process  rate  determined  along 
the  lines  to  be  expounded.  It  is  as  absolutely  necessary  in 
the  determination  of  true  costs  to  have  a  true  distribution 
of  burden  as  it  is  to  know  how  much  direct  labor  and 


FREDERIC    A.    PARKHURST 


85 


direct  material  was  employed  or  used  in  connection  with 
any  specific  operation  or  job.  No  argument  can  be  sus- 
tained that  supports  a  method  averaging  a  wide  range  of 
equipment  which  ignores  the  relative  wear  and  tear  and  the 
relative  power  and  consumption  of  investment,  or  which 
does  not  recognize  the  various  classes  of  labor  employed 
to  use  that  equipment. 

To  obtain  an  accurate  distribution,  iirst,  determine  the 
several  burdens  which  the  problem  presents  and  keep  them 
separate  as  far  as  the  monthly  expression  of  their  valuation, 
and  the  analysis  of  the  amounts  from  which  they  are  deter- 
mined are  concerned.  An  analysis  of  the  statement  for  the 
period  is  desirable.  Compare  the  different  burden  amounts 
both  by  amount  and  by  burden  rate,  as  the  expenses  going 
to  make  up  these  amounts  can  be  more  readily  separated 
and  understood  in  this  way. 

Second,  after  the  differential  burden  rates  have  been 
determined  and  are  ready  for  use,  either  in  connection  with 
estimates  or  the  recapitulation  of  costs,  the  several  hourly 
rates  may  be  added  together,  to  make  one  fixed  sum  for 
each  piece  of  equipment  or  work  point.  Of  course,  if  the 
several  burdens  include  a  piece  or  pound  burden,  this  fig- 
ure will  have  to  be  used  as  still  another  item  and  added 
to  the  cost  or  estimate  as  a  separate  amount.  The  point 
is  that  several  burden  rates  for  one  unit  or  work  point  may 
be  combined  so  as  to  have  less  factors  to  use  in  connection 
with  figuring.  The  latter  method  is  preferable  and  the 
detail  below  is  based  on  such  a  combination. 

In  this  connection  it  is  sometimes  possible  and  desirable 
to  include  the  operator's  rate  in  the  total  figure  used,  but 
it  is  not  recommended.  It  requires  a  great  deal  of  detail 
and  supervision  on  account  of  the  fluctuations  in  rates  as 
applied  on  different  work,  particularly  when  the  shop  is 
not  working  to  its  normal  capacity.  Charge  all  bonus  as 
a  direct  item  against  each  job,  as  it  is  a  variable  factor. 
Combine  the  hourly  rates  and  list  them  by  work  units  de- 
partmentally.  Include  in  this  total  rate  all  the  various  items 
above  considered. 


86 


DIFFERENTIAL    PROCESS    RATE    METHOD 


Total  true  cost  is  compounded  of  the  hourly  differential 
process  rate  plus  pound,  piece  or  other  burden  not  possible 
to  include  in  the  process  rate,  plus  direct  labor,  to  which 
bonus  has  been  added,  plus  direct  material. 

The  following-  items  are  to  be  figured  for  each  individual 
machine,  bench  or  other  piece  of  apparatus  that  constitutes 
a  work  point.  In  cases  of  a  duplex  machine  that  is  operated 
by  more  than  one  man  each  item  must  be  figured  separately 
for  each  work  point.  For  example,  a  double  bufiing  wheel 
stand  has  two  work  points.  Symbolize  each  end  and  figure 
each  as  a  separate  machine,  splitting  cost  installed,  etc.,  to 
the  correct  proportion  for  each  work  point,  all  in  accord- 
ance with  the  following  schedule  of  factors. 

Schedule  of  Differential  Process  Rate  Factors. 

(9-hour  day.) 

ITEM  NUMBER 

Symbol  of  machine  or  work  point. 

Maker's  name. 

Style. 

Size  or  number. 

Floor  space  allotted  to  same. 

Horse-power  actually  consumed. 

Value  installed  complete. 

Interest,  insurance  and  taxes. 

Depreciation. 

Indirect  machine  cost    (X4  and  X6). 

Heat,  light  and  rent. 

Power  and  transmission  expense. 

Total  "B"  yearly  charges    (8  to   12  in- 
clusive). 

Machine  rate  per  direct  hour   (Item  13 

divided  by  2000). 
Department   base   rate   per   direct  hour 

(XI  to  X32  exclusive  X4  and  X6). 
Local  plant  base  rate  per  direct  hour  and 

for  departments  not  provided  for  in 

15.    (AXl  to  AX56). 
General    administration,    financial,    sales 

and  operating  expense  (GAX  to  GXX 
inclusive)   per  direct  hour. 
Minimum  profit  factor  per  direct  hour. 

j^  r  19.  Process  rate  to  use  per  direct  hour  for 

_.„  .  ,  I  each  specific  work  point,  viz.  sum  of 

Differential  process  rate.  [  14^  15^  15^  17  and  18. 


Description  of  equipment 
used  at  each  work  point 
by  each  individual  em- 
ployed as  direct  labor. 

B 

Items      forming     yearly 


1. 
2. 
3. 
4. 
5. 
6. 


8. 
9. 


charges  at  each  work  j  10. 
point  described  above  11. 
in  A.  [  12. 

13. 


14. 
15. 


Hourly  rates. 


16. 

17. 

18. 
19. 


FREDERIC    A.    PARKHURST 


87 


Basis  on  which  Differential  Process  Rates  are  Figured 

as  per  Schedule  Above. 

(Computed  on  a  9-hour  day.) 


Item  No. 
1.  Symbol. 


2.  Maker. 

3.  Style. 


4.  Size. 


5.  Floor  space. 


DESCRIPTION  ITEMS 
(1-7  inclusive) 

This  symbol  indicates  the  particular  machine, 
bench  or  other  apparatus  constituting  a  work 
point  and  is  for  identification  purposes. 

Maker's  name. 

Whether  hand,  power,  turret,  universal,  etc.,  de- 
pending on  kind  of  equipment.  Detail  sufficiently 
to  assist  in  determining  general  style  of  the 
machine,  bench  or  apparatus. 

Give  sufficient  data  to  indicate  main  capacity 
measurements  of  the  apparatus  and  maker's  num- 
ber or  symbol  if  one  is  obtainable. 

This  is  to  be  expressed  in  square  feet.  Make  an 
allowance  for  working  space  around  machine  or 
bench  adequately  to  handle  its  material.  This 
forms  the  basis  for  prorating  heat,  light  and  rent. 
Item  11. 

This  item  is  to  be  based  on  the  actual  horse-power 
used  for  each  machine  compared  to  the  total 
horse-power  on  any  one  transmission  line. 
(See  7-f.) 

7.  Value  installed.     This  figure  should  be  the  total  cost  in  running 

order  set  up  and  includes  cost  of: 

a.  Machine  and  appurtenances. 

b.  Freight. 

c.  Cartage  and  placing  on  site. 

d.  Millwright    work    and    material,    cost    of 
foundations,  assembling,  etc. 

e.  Belts,  etc. 

/.  Proportion  of  cost  of  motor  drive  and  wiring ; 
or  of  transmission  shafting,  wiring,  motor 
and  belt  which  drives  same.  Base  on  H.P. 
consumed  as  compared  to  total  on  any  one 
line.    (See  6  and  12  and  list  herewith.) 


6.  Horse-power. 


'  : 


if 


ii 


in 


f 


IMI 


88 


DIFFERENTIAL    PROCESS    RATE    METHOD 


TABLE  II 


Example  for  7f 


LINE  SHAFT  NUMBER 


Horse-power 


13.5 


18.5 


35 


5  and  6 


24 


35 


Motorcost $180.00  $275.00  $320.00 

Wiring  cost  ... .    98.50  197.00  345.00 

Belt  cost  17.60  26.40  35.20 

Transmission  cost  217.00  280.00  280.00 


$275.00  $320.00 

197.00  345.00 

26.40  35.20 

280.00  224.00 


Total  cost  ..$513.10    $778.40    $980.20    $778.40    $924.30 


Per  H.P $38.00     $42.09     $28.00    $32.43     $26.40 


YEARLY  CHARGES 

(8-12  inclusive) 

Based  on  the  above  we  must  now  determine  the  cost  per  year  ex- 
pressed in  dollars  for  the  following  factors.  The  total  of  8  to  12 
inclusive  (13)  will  then  be  divided  by  2000  hours  to  determine  the 
hourly  rate  for  14.     (See  14  and  15  below.) 


Item  No. 
8.  Interest,  etc. — 


Based  on  sum  of : 

a.  Interest 

b.  Insurance 

c.  Taxes 


■use  prevailing  rates. 


9.  Depreciation  20%  This  figure  is  used  on  the  assumption  that  the 
(To  be  varied  to  equipment  running  at  maximum  capacity  for  5 
suit  conditions)    years  becomes  more  or  less  obsolete,  or  has  such 

a  reduced  value  as  compared  with  the  latest  im- 
proved machines  that  it  will  have  to  be  replaced, 
or  almost  entirely  rebuilt. 

10.  Indirect  machine  This   item   includes   any   repairs   or   maintenance 

cost.  cost,  and  material  or  sundries  incidental  to  the 

daily  operation,  etc.  Expenses  X4  and  X6  for 
each  machine  or  bench  by  symbol. 

11.  Heat,    light    and  This  item  is  prorated  to  each  machine  or  bench 

rent.  based  on  "5"  after  deducting  the  amount  charged 

to  the  department  rate  as  explained  for  "15.'* 


FREDERIC    A.    PARKHURST 


89 


EXAMPLE 


Light 

Equipment 


Heating 
Plant 


Land  and 
Building 


Cost  Installed 


$900.00 


$4352.00 


$27,500.00 


Totals 


Interest    $54.00  $261.12 

Depreciation  90.00  435.20 

Electricity   252.00        

Fuel  and  labor 2000.00 

Insurance    3.60  17.40 

Taxes   2.70  13.06 


$1650.00 
1375.00 


105.00 
82.50 


$1965.13 

1900.20 

252.00 

2000.00 

126.00 

98.26 


Total  rent  per  year. 


$6341.58 


In  the  example  shown  the  total  rent  chargeable  to  the 
department,  based  on  that  department's  valuation  in  light- 
ing and  heating  equipment  and  in  its  land  and  building, 
amounts  to  $6341.58  per  year.  If  we  assume  a  total  floor 
space  of  20,000  square  feet  we  have  $.3178  per  year  rental 
per  square  foot.  The  number  of  square  feet  allotted  to  each 
work  point  (Item  5)  multiplied  by  $.3178  gives  the  yearly 
charge  for  that  work  point  (Item  11).  The  total  cross 
added  amount  (Item  11)  subtracted  from  $6341.58  leaves  a 
balance  of  undistributed  rent  which  forms  one  of  the  depart- 
mental charges  included  in  Item  15. 


Item  No. 

12.  Power  and 
transmission  Ex. 


13.  Total  yearly 
charges. 


14.  Rate  per  hour 
for  13. 


This  should  be  based  on  the  horse-power  hours 
for  each  motor  drive  for  2000  hours  per  year ;  or 
total  horse-power  hours  X  cost  for  elctricity  per 
horse-power  hour.  Add  maintenance  of  shaft, 
belt,  etc.,  not  provided  for  above  in  "10."  Pro- 
rate as  per  "6."  The  sam  principle  applies  to 
any  kind  of  power. 

This  is  the  sum  of  8  to  12  inclusive  expressed  in 
dollars,  and  covers  one  year's  cost  for  each  work 
point  sparately. 

HOURLY  RATES 
(14-18  inclusive) 

The  yearly  total  for  each  work  point  (see  13)  is 
to  be  divided  by  2000  to  determine  the  cost  per 
hour.  The  normal  year  of  2000  direct  hours  is 
determined  as  follows: 


90 


DIFFERENTIAL    PROCESS    RATE    METHOD 

a.  300  working  days  per  year. 

b.  300X9  hours  per  day =2700  direct  hours  per 
year. 

c.  Consider  75%  capacity  as  a  fair  average 
normal  working  year  or  2025  hours:  say 
2000  hours  per  year  for  each  work  point. 


Item  Na. 


15.  Dept.  base  rate. 


This  rate  is  determined  by  taking  all  of  the  ex- 
penses of  a  department  that  are  not  included  in 
8  to  12  inclusive  and  dividing  same  by  the  product 
of  direct  man  daysX2000,  or: 


Dept.  Yearly  Expense  (8  to  12  inclusive) 
Total   dept.   direct  man  hours   per  year 


=Dept.  Rate. 


16.  Local  plant  base 
rate  per  di- 
rect hour. 


The  Departmental  yearly  expense  includes  all 
XI  to  X32  (less  X4  and  X6)  items  in  operating 
statement.  From  the  figures  so  determined  for  a 
year  we  must  subtract  the  amount  of  money  rep- 
resented above  in  Items  8  to  12  inclusive,  and 
which  have  already  been  prorated  into  the  ma- 
chine rate,  else  we  have  it  in  twice.  This  can  be 
readily  done  by  subtracting  the  sum  of  Item  13, 
cross  added  for  all  symbols,  from  the  total  in- 
direct cost  of  running  the  department  for  one 
year.  The  department  base  rate  is  the  same  per 
hour  for  each  work  point  in  that  department. 

This  amount  is  determined  as  follows.  From  the 
operating  statement  there  must  be  determined 
the  yearly  charges  against  the  plant  as  a  whole 
which  have  not  been  distributed  into  the  depart- 
mental base  rate,  Item  15.  This  Item  16  is  to  in- 
clude all  AXl  to  AX56  expense  plus  department 
expenses  XI  to  X32  for  the  departments,  such  as 
office,  shipping,  receiving,  timekeeping,  planning, 
etc.,  etc.,  which  are  not  included  in  department 
rates,  Item  IS. 

All  yearly  land  and  building  charges  and  other 
items  lare  to  be  included  for  that  part  of  the  plant 
not  distributed  into  the  machine  and  departmental 


FREDERIC    A.    PARKHURST 


91 


rates,    Items    14    and    15. 
tributed : 


This    includes    undis- 


a.  Interest. 

b.  Taxes. 

c.  Insurance. 

d.  Depreciation. 

e.  Also    unapportioned    AX    and    departmental 
items  above  mentioned. 

The  sum  for  one  year  determined  as  above 
explained  is  to  be  brought  down  to  a  rate  per 
direct  hour  by  the  same  formula  as  given  for 
Item  13,  viz. : 


Undistributed  Local  Plant   Yearly  Charges 
Total  direct  hours  for  entire  plant 


=Local  Plant  Rate. 


Item  No. 

17.  General  base 
rate. 


1 


^^ 


The  local  plant  base  rate  so  determined  is  the 
same  for  every  work  point. 

This  item  is  the  sum  of  the  general  expenses  of 
the  business  not  included  above.  If  there  is  more 
than  one  plant,  these  charges  are  prorated 
monthly  to  each  plant.  These  expenses  are  cov- 
ered by  the  GAX  to  GXX,  Items  1  to  56  inclu- 
sive, and  do  not  include  any  charges  provided  for 
in  any  of  the  foregoing  items,  13  to  16  inclusive. 
The  sum  of  these  general  expenses  for  one  year 
prorated  to  each  plant  should  be  divided  by  the 
normal  total  direct  hours  worked  by  that  plant 
as  explained  above  for  Item  16.  This  rate  per 
hour  is  the  same  for  all  work  points. 

18.  Minimum  profit     Use  for  this  a  rate  per  hour  (for  example.  15c  to 

factor  per  di-  25c),  which  will  net  a  minimum  profit  per  year 
rect  hour.  on  the  invested  amount  of  at  least  6%.    The  pro- 

duct of  the  total  normal  work  points  for  any 
plant  multiplied  by  2000  hours  (for  a  9-hour 
day),  divided  into  6%  of  the  total  investment 
for  that  plant  will  give  the  correct  amount  per 
hour  to  use  as  a  minimum  profit  factor.  This  is  a 
safety  factor  to'  be  considered  part  of  cost  of 
production. 

DIFFERENTIAL  PROCESS  RATE 

(19) 

19.  Differential  pro-     This  amount  for  each  work  point  is  the  sum  of 

cess  rate  to  Items  14,  15,  16,  17  and  18.  A  list  of  each  work 
be  added  to  point  identified  by  symbol  should  be  made  with 
every  hour  of  the  process  rate  shown  opposite  each  work  point, 
direct  labor.       Reference  to  this  list  gives  instantly  the  correct 

rate  to  use  for  any  operation  when  figuring  either 

estimates  or  costs. 


u 


92 


UNDISTRIBUTED   BURDEN 


4-F.  Undistributed  Burden 


A  number  of  different  ways  of  disposing  of  undistributed 
or  unearned  burden  has  been  suggested  and  in  fact  used  to 
some  extent.  Too  often  the  matter  is  overlooked  entirely. 
Modern  business  now  demands  that  this  very  important 
point  be  definitely  settled  and  disposition  made  of  it.  The 
fact  must  not  be  overlooked  that  past  practice  is  not  ap- 
plicable in  these  times.  Why?  Because  business  condi- 
tions no  longer  permit  of  long  prices,  cheap  materials  and 
labor,  orders  coming  in  unsolicited,  ignorance  of  costs  and 
"guessed  at"  selling  prices. 

Elsewhere  emphasis  has  been  laid  on  the  importance  of 
limiting  the  chargeable  burden  when  it  is  too  high  due  to 
low  production.  The  reason  as  explained  above  is  so  as 
not  to  get  excessive  costs  or  high  (and  false)  inventory 
valuations.  On  the  other  hand,  it  seems  fair  to  get  advan- 
tage of  a  burden  slightly  below  the  high  limit  established 
whenever  the  volume  of  business  makes  this  possible.  The 
establishment  of  this  high  or  "limit"  mark  should  be  based 
on  fair  averages  and  the  consensus  of  opinion  of  the  prin- 
cipals. 

By  the  establishment  of  a  maximum  burden  limit  (either 
hour,  pound  or  other  unit  of  distribution)  we  are  able  to 
use  that  limit  figure  to  estimate  costs  when  establishing 
selling  prices.  Such  estimates  must  always  l)e  based  on  this 
maximum  allowable  burden  limit — no  more  or  no  less. 

In  the  author's  estimation,  the  unearned  burden  should 
be  debited  to  the  Loss  and  Gain  account.  Each  monthly 
operating  statement  should  show  the  amount  of  this  charge 
in  a  separate  item.  This  same  amount  should  also  be  ex- 
pressed in  memo  as  an  item  properly  chargeable  against 
sales  expense  for  that  period.  This  can  appear  as  an  extra 
item  of  sales  bad  work  expense,  X32. 


i 


LECTURE  XVIII 


ESTIMATING 

6-A.    Machine  Shop. 
6-B.    Foundry. 


The  following  discussion  of  the  above  subjects  has  been  reprinted 
from  Chapter  VI  of  the  author's  "Predetermination  of  Prices."  Fig- 
ures referred  to  have  been  omitted  and  the  student  is  referred  to  the 
above  mentioned  book  for  further  detail. 

The  foregoing  chapters  have  shown  the  method  of 
analyzing  and  obtaining  detailed  figures  for  the  compilation 
of  true  costs.  Without  a  cost  analysis  and  detailed  informa- 
tion, it  is  impossible  to  make  an  accurate  estimate.  An 
estimate  should  contain  no  minutest  per  cent  of  "guess 
work."  It  should  be  based  on  a  complete  detail  knowledge 
of  everything  pertaining  to  the  operation  of  the  plant  which 
is  going  to  manufacture  the  product  on  which  the  estimate 
is  to  be  made.  The  more  highly  organized  the  plant  and  the 
more  complete  the  plant's  records  are,  the  more  correct  will 
be  the  estimate. 

It  is  necessary  to  predetermine  costs  preparatory  to 
reaching  the  true  selling  prices.  The  predetermination  of 
a  cost,  of  course,  depends  on  the  records  above  referred  to, 
though  past  records  represent  the  basis  on  which  predeter- 
mination of  cost  depends.  In  plants  where  the  science  of 
management  has  established  elemental  operation  and  pro- 
duction standards  and  where  the  efficiency  ratio  is  a  figure 
which  is  always  known,  the  predetermination  of  costs  can 
be  worked  down  to  such  a  point  that  the  actual  cost  and 
the  estimated  costs  will  agree  within  a  very  few  per  cent. 
On  the  face  of  it,  the  statement  that  cost  can  be  predeter- 
mined sounds  a  little  "fishy"  to  the  layman.  P!ractice 
has  proved  that  the  predetermination  of  cost  is  not  only 
possible,  but  an  established  fact  and  a  most  essential  one 
for  the  producer  and  purchaser  alike. 

A  complete  discussion  of  the  subject  of  estimating  would 
take  up  too  much  space,  as  the  details  vary  much  in  different 

93 


! 


94 


MACHINE    SHOP 


kinds  of  work  and  in  different  lines  of  business;  but  it  may 
be  well  to  mention  several  of  the  important  points  to  be 
considered  when  making  estimates  on  the  average  jobbing 
or  machining  jobs  in  any  of  the  allied  metal  trades,  including 
foundry  work. 

6-A.  Machine  Shop 

The  following  is  an  abstract  from  one  of  the  author's  in- 
structions on  estimating  issued  to  a  plant  manufacturing 
machine  tools  and  dies  and  doing  some  jobbing  and  develop- 
ing w'ork. 

An  estimate  should  be  written  (using  form  FAP36a)  for 
every  proposal  quoting  a  price  for  product  not  standard. 
The  form  above  referred  to  must  be  filled  out  complete  as 
per  the  printed  matter  thereon.    (See  Fig.  23.) 

Estimates  shall  be  made  only  by  those  authorized  by  the 
Company  (chiefly  the  Engineers)  and  by  those  to  whom 
estimate  books  have  been  issued.  These  books  contain  a 
white  original  form  and  one  yellow  duplicate  with  some- 
times a  blue  triplicate.  The  white  original,  when  com- 
plete, must  be  forwarded  to  the  Sales  Manager,  who  will 
see  that  it  is  filed  with  the  prospect's  correspondence  and 
attached  to  the  file  copy  of  the  proposal.  The  carbon  or 
yellow  copy  remains  in  the  book  for  the  reference  of  the 
estimator. 

The  following  rules  should  be  observed  in  making  all 
estimates : 

a.  Divide  the  job  into  as  many  groups  as  possible. 
Treat  each  group  or  item  separately  and  completely. 
Make  this  grouping  conform  to  that  which  will  be 
used  in  making  out  the  order.  The  estimates  can 
then  be  closely  checked  while  w^ork  is  in  process  and 
after  it  is  completed.  The  estimate  should  be  used 
as  a  guide  by  the  Order  Clerk  w'hen  itemizing  the 
general  order. 

b.  Include  every  item  of  the  expense  incident  to  pro- 
ducing the  article  or  articles  being  estimated  on, 
including  special  sales  expense  (if  any),  designing, 
drawing,  engineering  supervision,   patterns,   all   ma- 


i 


FREDERIC    A.    PARKHURST 


95 


terial  in  detail  by  classes  and  weight,  labor  by  indi- 
vidual operations  and  prices  as  much  as  possible, 
including  assembling,  fitting  up,  testing,  photograph- 
ing, crating,  boxing,  loading,  etc. 

c.  A  list  will  be  provided  giving  the  differential  process 
rates,  or  if  this  is  not  available,  the  item  of  expense 
must  be  provided  for  by  the  estimator  and  the 
"amount"  left  to  be  filled  in  by  the  Production  Man- 
ager. Treat  other  questionable  items  in  the  same 
way.  Leave  nothing  out;  the  costs  will  be  provided 
in  all  cases  where  they  are  not  available  to  the  estima- 
tor. 

d.  The  estimator  knows  from  the  original  inquiry  com- 
bined with  the  specifications  of  the  Engineering  de- 
partment w^hat  is  to  be  estimated  on.  The  Engineers 
often  are  the  only  ones  who  have  all  the  details.  All 
material,  labor,  etc.,  must  be  included  or  else  the  sales 
department  cannot  intelligently  quote.  Failure  to  do 
this,  or  a  resort  to  pure  "guess  work,"  means  a  loss 
to  the  Company. 

e.  All  estimates  should  total  as  costs  to  the  manufacturer, 
and  not  selling  prices.  Fixing  the  selling  price  is  not 
up  to  the  estimator. 

/.  An  intelligent  analysis  (including  the  itemizing)  of 
an  inquiry  is  absolutely  necessary  before  proceeding 
w^ith  the  detailed  estimate  along  the  lines  outlined 
above.  The  fact  must  not  be  lost  sight  of  that  if 
the  estimate  is  not  accurately  made,  the  cost  is  likely 
to  overrun,  resulting  in  a  loss.  All  weights  must  be 
very  accurately  calculated  based  on  the  rough  sizes 
of  the  material  before  finishing. 

When  issuing  the  general  order  for  any  job  on  which 
an  estimate  has  been  prepared,  it  is  the  Chief  Order  Clerk's 
duty  to  see  that  the  estimate  number  appears  in  the  w^ord- 
ing  of  the  order  for  each  item  on  which  there  was  an  esti- 
mate. This  reference  is  for  the  attention  of  the  Engineers 
and  Draftsmen  so  that  the  designing  may  be  carried  through 
in  accordance  with  the  estimate,  and  for  the  planning  de- 


1^ 


V 

Ik,' 


li: 


96 


MACHINE    SHOP 


partment  so  that  they  may  intelligently  route  and  bring  the 
job  through  within  the  cost  limits  estimated. 

The  sales  department  should  never  quote  a  price  until 
an  accurate  and  careful  detailed  estimate  as  above  described 
has  been  made.  On  new  die  work  a  definite  price  should 
never  be  quoted,  but  use  the  estimates  as  a  guide  to  deter- 
mine about  how  much  the  dies  should  cost.  The  experi- 
mental cost  on  this  class  of  work  is  always  an  unknown 
quantity. 

Let  us  refer,  at  this  point,  to  Chapter  II,  2- A  to  2-I 
inclusive,  wherein  a  number  of  functional  developments 
of  management  are  explained  as  having  an  important  bear- 
ing on  true  costs.  The  preliminaries,  or  shop  control  of 
work  in  process,  and  all  indirect  expense  items,  have  a  very 
direct  influence  on  the  accuracy  of  an  estimate.  One  real- 
izes the  particular  truth  of  such  a  statement  when  appre- 
ciating that  in  the  last  analysis  an  estimate  is  practically 
the  predetermination  of  costs. 

The  Planning  Room  is  directly  responsible  for  the  con- 
trol of  materials  and  labor  and  all  other  resources,  so  as  to 
not  only  maintain  standards,  but  to  preclude  any  possibility 
of  costs  overrunning  estimates  through  lack  of  knowledge 
of  just  what  was  included  at  the  time  the  estimate  was 
made.  Verbal  orders  from  customers  must  be  approved  in 
writing.    See  forms  shown  in  Figs.  24  and  25. 

In  developing  a  correct  estimate  on  any  new  work  there 
are  many  items  to  be  considered  and  in  practically  every 
business  there  are  some  items  which  are  subject  to  such 
variations  that  it  is  very  difficult  to  predetermine  their 
cost.  Specific  experimental  features  always  add  a  distinctly 
unstaple  factor  especially  where  new  designs  of  drawn  or 
stamped  work  are  involved.  In  such  cases,  estimates  rep- 
resent an  approximate  rather  than  a  definite  figure  on  which 
to  base  a  fixed  selling  price,  and  such  estimates  should  be 
considered  as  only  an  approximate  indication  of  what  the 
work  will  cost  the  customer.  Prices  should  be  based  on 
cost  plus  a  profit  figured  in  any  of  several  ways,  which  will 
be  discussed  in  detail  under  Chapter  VII. 


FREDERIC    A.    PARKHURST 


97 


Regardless  of  the  kind  of  business  and  the  class  of  work 
to  be  estimated  on,  it  is  imperative  that  the  estimator  be 
supplied  with  complete  data  based  on  analytical  costs  of 
both  direct  labor,  direct  material  and  the  various  indirect 
expenses.  These  expenses  should  be  expressed  in  terms  of 
differential  process  rates  and  burden  rates  with  all  their 
variations.  Classes  of  work  permitting  of  a  definite  estimate 
should  always  be  figured  on  a  full  consideration  of  all  the 
figures  available.  These  should  be  applied  in  accordance 
with  the  methods  outlined  above. 

When  the  time  study  methods  are  sufficiently  advanced 
so  that  a  check  can  be  kept  on  the  plant  efficiency,  direct 
labor  cost  should  be  figured  on  the  maximum  efficiency 
basis.  After  the  figures  have  been  compiled,  those  which 
vary  according  to  the  relative  efficiency  of  the  man  per- 
forming the  direct  labor  should  be  increased  by  using  the 
plant  efficiency  factor  as  it  stands  from  period  to  period. 
Assuming  the  plant  efficiency  to  be  running  70%  of  the 
time  study  standard,  or  maximum,  the  estimates  for  this 
part  of  the  work  would  be  increased  by  1.43.  If  the  men 
are  running  around  80%  of  the  maximum  efficiency,  such 
an  estimate  would  be  represented  by  the  factor  1.25.  This 
factor  alters  with  the  conditions.  In  cases  where  the  effi- 
ciency factor  is  not  used,  the  estimate  must  be  figured  on  a 
basis  of  existing  records. 

6-B.  Foundry 

The  following  is  an  abstract  from  a  standard  instruc- 
tion covering  the  method  of  estimating  on  foundry  work, 
including  machine  operations  in  cases  where  the  price  cov- 
ers a  piece  machined  complete. 

The  estimate  form  FAP134  is  made  up  in  book  form 
(see  Fig.  26),  so  that  a  white  original  copy  may  be  used 
in  connection  with  the  carbon  paper  and  detached  from 
the  book  when  the  estimate  is  complete.  The  white  orig- 
inal is  filed  in  Sales  department.  The  yellow  copy  remains 
in  the  book  as  the  estimator's  record  of  each  estimate.  A 
detachable  carbon  "rider"  is  also  provided  to  give  an  extra 


98 


FOUNDRY 


record  of  the  general  specification  of  the  estimate,  equip- 
ment, method,  average  weight,  etc.  The  rider  is  sent  to  the 
Planning  Room  as  their  guide  in  handling  the  order.  (See 
Fig.  2y.) 

All  of  the  information  asked  for  in  the  printed  heading 
forming  the  top  part  of  the  sheet  should  be  filled  in  com- 
plete. The  heading  indicates  the  basis  on  which  the  esti- 
mate was  made  and  the  method  under  which  the  plant 
expects  to  run  the  order  in  the  event  the  business  is  secured. 
In  making  estimates,  do  not  assume  a  lot  of  conditions  but 
be  sure  all  of  the  points  referred  to  on  the  form  are  ac- 
counted for.  If  one  does  not  have  full  information  of  what 
is  required  for  a  job,  it  will  be  a  hopeless  task  to  intelli- 
gently estimate  what  it  will  cost.  Neither  can  one  hope  to 
intelligently  fix  a  selling  price  which  will  be  profitable  and 
yet  not  excessive. 

In  cases  involving  more  than  one  different  price,  a  sepa- 
rate detailed  estimate  is  to  be  made  of  the  cost  of  castings 
from  each  pattern  or  each  different  size  or  design,  whether 
rough  or  finished,  or  both. 

Estimates  must  be  made  only  by  a  duly  authorized 
person  and  approved  by  the  local  manager,  production  man- 
ager and  superintendent.  All  estimates  shall  be  made  in 
accordance  with  this  instruction  and  on  estimate  form 
FAP134.  The  original  copy  of  all  estimates  shall  be  filed 
in  the  estimate  file.  All  orders  received  subsequent  to  or 
based  on  an  estimate  must  show  the  estimate  number  on 
the  general  order  form. 

When  cost  sheets  are  closed  up,  the  summary  cost  card, 
Form  FA  Pi  45,  shall  also  show  the  estimate  number. 

In  making  estimates,  be  sure  that  full  information  is  had 
regarding  the  pattern  equipment  from  which  such  castings 
are  to  be  made.  Whenever  possible,  it  is  desirable  that 
full  pattern  equipment  be  made  in  the  pattern  shop  con- 
nected with  the  foundry  which  is  to  supply  the  castings. 
There  will  be  cases,  of  course,  where  the  customer  desires 
to  furnish  his  own  equipment.  In  such  case  the  foundry 
officials  can  often  consult  with  him  in  reference  to  furnish- 


FREDERIC    A.    PARKHURST 


99 


ing  the  proper  kind  of  patterns,  rigged  up  to  suit  the  best 
foundry  practice. 

Whether  the  patterns  are  made  new,  and  furnished  by 
the  customer  or  made  new  by  the  foundry  the  most  careful 
observation  must  be  given  to  the  kind  and  style  of  each 
pattern  and  the  method  of  rigging  up.  All  patterns  for 
small  work  should  be  plated  wherever  possible.  Pattern 
equipment  and  estimates  should  include  core  dryers,  and 
any  special  rigging  or  jigs  that  may  be  necessary  in  con- 
nection with  making  or  setting  cores.  It  shall  be  the  policy 
as  far  as  possible  to  include  such  rigging  in  the  cost  of 
the  pattern  equipment,  all  of  which  should  be  paid  for  by 
the  customer.  Include  in  this  charge  to  the  customer  ever\^- 
thing  not  part  of  the  regular  standard  equipment  and  in- 
clude labor  of  getting  it  rigged  up,  also  cost  of  jigs,  gauges, 
etc.,  used  in  setting  or  sizing  cores. 

In  case  of  patterns  and  equipment  already  in  existence, 
and  for  which  new  patterns  cannot  be  obtained,  the  foundry 
should  keep  in  close  touch  with  the  customer  to  see  that 
such  patterns  are  kept  up  in  first-class  condition.  Many 
gated  patterns  require  matches,  which  after  some  use  be- 
come more  or  less  broken  down  around  the  edges.  If  the 
matches  are  not  kept  in  good  repair,  the  foundry  cannot 
realize  maximum  production  on  such  jobs.  It  should  be 
the  foundry  policy  to  refuse  to  run  patterns  which  are 
not  in  proper  condition  or  which  are  so  arranged  that  the 
foundry  will  be  put  to  additional  expense  in  turning  out 
castings.  In  such  cases,  the  foundry  must  get  the  co-opera- 
tion of  the  customer  toward  putting  the  patterns  in  first- 
class  shape,  with  his  authority,  of  course,  and  with  the 
understanding  that  such  altering  or  repairing  of  patterns 
is  to  be  charged  up  to  him. 

There  is  no  economy  in  running  pattern  equipment  after 
it  begins  to  get  out  of  repair,  or  pattern  equipment  which 
is  not  adequate,  or  properly  arranged,  for  the  class  of  work 
in  question.  It  must  be  the  policy  to  give  patterns  careful 
inspection,  and  if  necessary  make  sample  molds  enough  to 
be  sure  that  the  pattern  and  other  accessories  are  in  first- 


S 


"it 


lOO 


FOUNDRY 


class  shape  and  ready  for  regular  production.  This  work 
must  be  done  by  the  Equipment  Foreman,  who  is  a  specially 
trained  man.  When  the  equipment  is  satisfactory,  it  may 
then  be  passed  to  the  job  rack,  preparatory  to  being  for- 
warded to  the  proper  floor  bench  or  machine  and  accom- 
panied by  the  proper  flask  (or  flasks),  bottom  boards,  etc., 
for  regular  production.  If  a  heavy  floor  job,  it  should  be 
tried  out  on  the  floor  where  it  is  to  be  run. 

A  foundry  cannot  immediately  develop  its  pattern  equip- 
ment fully  along  the  lines  above  described,  but  such  should 
be  the  policy.  By  continually  working  in  this  direction  a 
great  improvement  can  be  effected,  not  only  in  the  cost  of 
producing  castings  but  in  the  quality  and  deliveries.  The 
above  facts  should  be  borne  in  mind  whenever  making  esti- 
mates, and  I  repeat  for  emphasis  the  fact  that  the  foundry 
should  not  "allow"  in  "castings  estimates,"  anything  for 
pattern  expense  or  equipment  which  should  be  charged  up 
to  the  customer.  On  the  other  hand,  do  not  hesitate  to  add 
into  your  estimate  anything  which  is  necessary  for  the 
proper  production  of  the  job. 

Pound  Prices 

Pound  prices  are  to  be  figured  on  a  basis  of  the  net  mini- 
mum weight  of  each  casting. 

Piece  Prices 

Piece  prices  are  to  be  figured  on  a  basis  of  the  average 
weight  of  each  casting,  plus  5%  to  io%  as  an  allowable 
foundry  weight  variation  under  commercial  production 
conditions.     This  percentage  varies  with  the  class  of  work. 

The  Planning  Room,  or  Office  (as  the  case  may  be)  daily 
checks  piece  weights  of  all  castings  shipped  the  day  before. 
The  check  consists  of  a  comparison  between  the  average 
weight  list  on  file  in  the  Planning  Room  or  Office,  and  the 
charge  slips  turned  in  by  the  Shipping  Clerk  for  the  previ- 
ous day's  shipments.  This  method  is  in  vogue  at  the  pres- 
ent time,  and  is  a  first  check  in  locating  errors  in  shipping 
weights  and  billing.     The  method  also  catches  any  errors 


FREDERIC    A.    PARKHURST 


lOI 


which  might  affect  the  average  weight  list,  due  to  an  altera- 
tion in  the  pattern  unknown  to  the  Planning  Room  or 
Office.  Although  it  is  unlikely  that  changes  will  be  made 
in  the  shops  without  orders,  commercial  productions  may 
increase  the  weight  of  the  castings  by  several  per  cent,  due 
to  strains,  inequality  in  cores,  etc.  It  is,  of  course,  neces- 
sary for  production  records  that  such  changes  be  known. 
When  selling  by  the  piece  price,  the  method  provides  a 
check  to  keep  the  weight  within  the  estimated  limits.  Al- 
though there  is  an  allowance  of  5%  or  10%  variation  in 
weight  in  estimates  for  castings  sold  by  the  piece,  still  it  is 
to  every  one's  advantage  to  hold  the  weight  as  near  normal 
as  possible.  On  some  classes  of  work  an  excessive  weight 
variation  might  mean  much  more  in  failing  to  machine 
properly  than  in  wasting  of  metal. 

The  following  method  is  to  be  employed  in  making  esti- 
mates for  castings  from  each  different  pattern : 

a.  Consult  existing  cost  data  to  determine  direct  labor 
similar  cost  on  the  particular  job  in  question,  or  for  a 
similar  job,  if  such  a  record  exists.  (See  price  card 
Fig.  28.) 

b.  Study  the  average  direct  labor  cost  record  of  work 
of  the  same  general  class,  if  such  record  exists. 

When  consulting  records  referred  to  in  items  'V  and 
"6"  above,  consider  only  the  direct  labor  cost,  and  not 
the  total  cost  including  burden.  The  item  of  burden 
is  likely  to  vary.  The  prevailing  rate  of  burden  at 
the  time  the  estimate  is  made  should  be  used.  For 
data  on  "Burden"  see  Instruction  108. 

c.  Consult  with  the  Superintendent,  Time  Study  Fore- 
man, Pattern  Shop  Foreman,  and  Cost  Clerk,  for 
data  and  estimates  on  direct  labor  costs. 

For  details  of  each  estimate  see  Form  FAP134,  Fig.  26. 

The  estimated  total  labor  cost,  determined  as  per  items 
"a'\  ''h"  and  'V  above  should  be  based  on  the  average 
prevailing  rate,  plus  the  bonus,  paid  the  class  of  help  to  be 
employed  on  that  particular  work.    These  figures  are  to  be 


102 


FOUNDRY 


based  on  specific  equipment  to  be  run  by  a  definite  prede- 
termined method,  and  in  the  size  flasks  best  adapted  to  the 
job.  For  standard  production  data,  flask  sizes,  etc.,  con- 
sult the  time  study  foreman.  Work  as  much  as  possible 
from  data  on  standard  time  sheets,  Form  FAB150. 

Burden 

Differential  burden  rates  and  differential  process  rates 
will  hereafter  be  referred  to  as  "burden."  (See  Instruction 
108.)  This  burden  is  to  be  added  to  the  estimate  on  the 
basis  of  so  much  money  per  man  hour  (and  not  as  a  per- 
centage factor),  plus  a  pound  burden. 

It  may  be  well  to  explain  here  the  reason  for  distributing 
the  burden  on  a  man  day  (or  hour)  basis  rather  than  by 
percentage  or  tonnage  basis.  Experience  has  shown  it  is 
more  accurate  to  distribute  on  the  basis  of  time,  rather  than 
on  the  percentage  of  wage  paid.  In  other  words,  time  is  the 
chief  controlling  factor  in  business.  Men  are  hired  on  a 
time  basis  at  so  much  per  hour,  and  the  extra  bonus  they 
earn  also  applies  to  a  definite  length  of  time.  Indirect  ex- 
pense, salaries,  etc.,  cover  a  definite  time.  Heat  and  light 
and  power  are  maintained  for  a  definite  time  each  day. 
Finally  a  day's  work  is  concluded  by  having  expended  so 
many  direct  hours  to  turn  out  a  certain  volume  of  work, 
per  each  man  employed,  as  direct  labor  on  all  production. 
For  each  man  so  employed  as  direct  labor  on  all  productive 
work,  so  much  money  has  been  paid  out  for  a  man  day,  a 
unit  of  time.  In  addition  that  man  day  has  cost  us  one 
man  day's  proportion  of  a  burden.  Why  do  many  foundry- 
men  ignore  this  time  element? 

In  addition  to  the  hourly  burden  there  is  a  pound  burden, 
which  covers  the  distribution  of  expense  for  departments 
iD,  2F,  iF,  iG,  iS  and  loX.  The  total  burden  is  pro- 
rated for  these  six  departments  on  a  pound  basis  in  addi- 
tion to  the  departmental  hourly  burden.  This  distribution 
is  obtained  by  taking  the  burden  for  the  current  month  and 
applying  it  to  the  number  of  pounds  of  good  castings  enter- 
ing into  the  estimate  in  question.  Pound  burden  is  dis- 
tributed to  castings  in  addition  to   the  departmental   or 


FREDERIC    A.    PARKHURST 


103 


process  rate  burden.  Other  burdens  exist  for  pattern  work 
iP  and  for  brass  finishing  work  2U.  This  is  prorated  on 
the  hourly  burden  basis,  also  under  the  differential  process 
rate. 

To  properly  summarize  the  preceding,  it  should  be  noted 
that  we  have  several  rates  of  burden  distribution,  which  in 
the  aggregate  are  called  our  differential  burdens.  The  list 
follows:  Any  estimate  or  cost  summary  must  include  one 
or  the  other,  and  perhaps  several  of  the  following  groups 
of  burden.  These  are  to  be  used  departmentally  for  each 
of  the  following  groups.     (See  Instruction  108.) 

Castings  j  Hourly  burden  and  pound  burden. 

Pattern  and  flask  / 

work     (iP,      iK  I  Hourly  burden. 

and  lU).  ( 

Machining  j  Differential  process  rate. 

Plant  Efficiency  Factor 


In  considering  items  'V,  "b"  and  'V^  a  conservative 
estimate  of  day  work  may  be  used  without  any  addition  due 
to  the  plant  efficiency,  as  such  a  conservative  estimate  would 
in  itself  cover  such  allowances.  Eventually,  however,  when 
all  direct  labor  is  under  control,  and  standard  production 
figures  govern  nearly  every  case  the  plant  efficiency  factor 
comes  into  use.  It  is  to  these  standard  maximum  produc- 
tion figures,  as  per  the  bonus  schedules  and  standard  ele- 
mental time  sheets,  that  the  following  factors  apply.  (See 
Form  FAP150,  Fig.  29.) 

Local  plant  conditions  at  the  time  of  the  installation  of 
scientific  methods  are  often  such  as  to  make  it  necessary  to 
start  bonus  as  low  as  60%  of  the  maximum  calculated  pro- 
duction. Later  on,  as  the  men  begin  to  earn  bonus,  and 
come  nearer  the  maximum,  this  factor  is  changed  to  70%. 
Later  this  factor  is  raised  to  80%. 

Plant  efficiency  factors  are  as  follows : 

For  60%  plant  efficiency  multiply  cost  by  1.66. 

For  70%  plant  efficiency  multiply  cost  by  1.42. 

For  80%  plant  efficiency  multiply  cost  t^  1.25. 


I04 


FOUNDRY 


I! 


I 


Referring  to  the  plant  efficiency  factors  shown  on  page 
98  it  is  obvious  that  when  estimating  a  job  in  a  70%  effi- 
ciency plant  the  factor  1.43  shonld  be  used  for  work  on 
which  the  bonus  starts  at  70%.  For  work  on  which  the 
bonus  starts  at  60%,  the  factor  1.66  should  be  used.  On  the 
other  hand,  w-hen  all  the  bonus  work  starts  at  80%,  the  esti- 
mate should  be  raised  by  the  factor  1.25.  This  factor  is,  of 
course,  only  used  in  estimates  where  the  basis  of  estimating 
is  equivalent  to  100%  bonus  production. 

In  cases  where  the  estimate  is  based  on  conserAative  day 
work  estimates  or  actual  cost  figures,  the  factor  does  not 
apply  and  the  actual  figures  are  used.  If  the  estimate  is 
based  on  standard  time  sheets  form  FAP150,  the  time  to 
be  used  will  be  found  in  the  maximum  bonus  time  column. 

The  detail  of  filling  in  an  estimate  form  is  as  follows: 
Form  FAP134  is  made  u])  in  book  form,  so  that  the  white 
original  w^ill  be  used  in  connection  with  the  carlx)n  paper 
and  detached  from  the  book  when  the  estimate  is  complete. 
The  yellow  copy  remains  in  the  book  as  the  estimator's 
record  of  each  estimate.  A  detachable  carbon  ''rider"  is 
also  provided  to  give  an  extra  record  of  the  general  speci- 
fication of  the  estimate,  equipment  method,  average  weight, 
etc.  The  rider  is  sent  to  the  Planning  Room  as  their  guide 
in  handling  the  order. 

AH  of  the  information  asked  for  in  the  printed  heading 
at  the  top  of  the  sheet  should  always  be  filled  in  complete. 
The  heading  indicates  the  basis  on  which  the  estimate  was 
made  and  the  method  under  which  the  plant  expects  to  run 
the  order  in  the  event  the  order  is  booked.  Overtmie  is  an 
important  consideration,  and  should  be  controlled  through 
the  medium  of  the  overtime  order.  (See  Fig.  30.)  In 
making  estimates,  do  not  assume  a  lot  of  conditions  and  be 
sure  all  of  the  points  referred  to  on  the  form  are  accounted 
for.  In  other  words,  if  full  information  of  w^hat  is  required 
for  a  job  is  not  at  hand  it  will  be  a  hopeless  task  to  intelli- 
gently estimate  what  the  job  will  cost.  Neither  can  one 
hope  to   intelligently  fix  a   selling  price   which   should  be 


FREDERIC    A.    PARKHURST 


105 


..k 


profitable  and  yet  which  though  profitable  will  not  be  ex- 
cessively so. 

It  will  be  noted  that  the  estimate  form  is  divided  into 
six  sections  numbered  from  i  to  6  inclusive.  The  follow- 
ing references  (sections  i,  2,  3,  etc.)  refer  to  the  sections 
indicated  on  the  form. 

Section  i  (Special  Items).  This  section  covers  any 
special  items  of  costs,  if  there  are  any,  which  may  enter  into 
the  estimate  in  question.  The  item  should  be  expressed  in 
hours,  the  rate  per  hour  shown  and  the  amount  of  money  ex- 
tended to  the  "Amount"  column.  The  burden  for  this  item 
should  represent  the  hourly  burden  based  on  the  prevailing 
rates.  The  burden  rates  should  go  into  the  "Rate"  column 
and  the  amount  of  the  burden  (the  hours  on  the  line  above 
multiplied  by  the  burden  rate)  go  into  the  "Amount" 
column.  If  there  is  any  material  applying  to  this  section  of 
the  estimate,  it  should  be  shown  in  the  "Amount"  column. 
The  "Amount"  and  "Hour"  column  should  then  be  totalled; 
this  total  represents  "Section  i  total." 

Section  2  (Pattern  and  Flask  Estimate).  This  section 
is  intended  to  include  all  items  entering  into  the  estimate 
as  far  as  pattern  and  flask  expense  is  concerned.  On  the 
first  line  should  appear  the  total  hours,  rate  and  amount  ex- 
pended on  this  item,  including  departments  iP,  iK  and  lU. 
In  the  second  line  the  pattern  burden  should  represent  the 
iP  burden  multiplied  by  the  total  hours  on  the  line  above, 
and  the  amount  carried  into  the  "Amount"  column.  The 
third  line  shows  any  direct  materials  or  sundries  that  may 
enter  into  the  costs  of  this  part  of  the  work.  The  total  of 
these  items  for  Section  2  gives  us  "Section  2  total." 

Section  3  (Castings  Estimate).  Under  this  section  we 
have  various  items,  such  as  core  making,  molding,  knock- 
ing out,  trimming,  and  any  other  direct  labor  as  well  as  a 
bonus  item  for  each  of  the  foregoing.  Opposite  each  of 
the  items  above  mentioned  should  appear  the  total  hours, 
rate  and  amount  covering  all  direct  labor  that  can  apply  to 
any  of  those  groups  and  affecting  the  possible  costs  of  the 
job  being  estimated  upon.     The  above   items   should   be 


i 


Hi 


io6 


FOUNDRY 


added,  so  as  to  get  a  sub-total  representing  the  total  direct 
hours  and  direct  amount. 

The  sub-total  should  then  be  increased  to  a  new  amount 
by  multiplying  it  by  the  plant  efficiency  factor,  either  1.25, 
1.43  or  1.66  referred  to  above.  To  this  new  amount  should 
be  added  the  hourly  burden  based  on  the  new  total  of  hours 
determined  by  the  use  of  the  plant  efficiency  factor  just 
referred  to.  On  the  next  line  should  be  added  an  additional 
burden  representing  the  pound  burden.  The  next  and  last 
item  making  up  the  castings  estimate  is  the  freight  from  the 
foundry  to  the  F.O.B.  of  the  customer,  providing  freight 
is  paid  by  the  foundry.  The  footing  of  these  four  last- 
mentioned  items  (bearing  in  mind,  of  course,  that  sub- 
total of  Section  3  is  ignored  because  it  has  been  replaced  by 
a  larger  amount  on  the  next  line)  represents  the  "Section  3 
total." 

Section  4  (Metal  Estimate).  This  section  includes  on 
the  first  line  the  prices  (F.O.B.  our  plant)  of  the  number 
of  pounds  of  metal  required  for  the  quantity  on  which  the 
estimate  is  based.  In  the  "rate"  column  should  appear  the 
rate  per  pound  used  in  determining  the  amount  in  question. 
On  the  next  line  should  be  shown  the  number  of  pounds  of 
chips  that  can  be  recovered  as  salvage  priced  at  a  conserva- 
tive rate  per  pound,  and  the  amount  deducted  from  the 
metal  cost  on  the  first  line.  The  balance  gives  us  our  "Sec- 
tion 4  total." 

Section  5  (Tools  for  Machining  Estimate).  This  sec- 
tion is  totalled  up  to  show  the  hours,  wages,  and  material 
estimate  for  the  tools  for  each  of  the  twenty  operations.  A 
summary  total  is  arranged  to  carry  the  total  tool  labor  in 
hours  and  amount  into  the  right-hand  columns.  On  the 
next  line  appears  the  total  tool  material  in  one  amount.  The 
third  line  takes  the  tool  burden,  which  burden  shall  be  the 
total  process  rate  for  work  points  applying  on  tools  for  the 
job  in  question.  These  three  items  foot  to  an  amount  which 
gives  us  the  "Section  5  total." 

Section  6  (Machining  Estimate).  This  section  is 
totalled  to  give  the  estimate  of  hours,  wages   (including 


^' 


II 


FREDERIC    A.    PARKHURST 


107 


bonus)  and  material  for  each  of  twenty  machining  opera- 
tions. The  material  column  is  to  include  only  miscellaneous 
material,  such  as  screws  and  other  parts  purchased  in  con- 
nection with  the  part  being  machined ;  and  is  not  to  include 
the  material  in  the  casting  itself.  This  item  was  taken  care 
of  in  "Section  4."  The  total  machining  labor  for  "Section 
6"  should  appear  in  hours  and  amount  in  the  right-hand 
column  followed  by  the  total  material.  The  next  item 
of  burden  represents  the  process  rates  for  the  number  of 
hours  estimated  as  applying  to  each  work  point  used  in  ma- 
chining.   These  items  sum  up  to  the  "Section  6  total." 

The  detail  of  the  estimate  is  now  complete.  Sections  i, 
2,  3,  4,  5  and  6  totals  shall  now  be  brought  down  to  the 
bottom  of  the  estimate  form  in  the  summary  section.  To 
the  right  of  these  totals  appears  the  profit  for  each  item  as 
well  as  the  percentage  which  the  profit  represents  of  the 
estimated  cost.  Methods  of  figuring  profit  are  considered 
in  Chapter  VII.  The  cross-addition  of  the  total  and  profit 
items  represents  the  amount  for  the  selling  price  columns. 
This  selling  price  is  divided  by  the  quantity  of  pieces  in- 
volved and  the  per  piece  selling  price  carried  out  into  the 
right-hand  column.  The  footing  of  these  6  items  gives  the 
total  estimated  cost  and  total  profit,  from  which  is  obtained 
total  selling  price  and  total  selling  price  per  piece  for  the 
work  covered  by  the  estimate.  A  line  is  also  provided  on 
which  to  show  the  sum  of  the  price  per  pound  in  cases 
where  it  is  desirable  to  express  the  price  in  such  manner. 
It  should  be  noted  that  the  profit  is  not  determined  on  a  per- 
centage basis.  The  percentage  column  in  the  summary  part 
of  the  estimate  sheet  referred  to  shows  how  much  the  per- 
centage of  profit  actually  is.  It  is  simply  a  statement  of 
fact  and  not  an  indication  of  the  method  of  determining 
the  said  profit. 


'!      ) 


-V       ! 


'I 

ri' 


LECTURE  XIX 

PROFIT  AND  RELATIVELY  TRUE  SELLING  PRICES 

7-A.  Per  Productive  Hours. 

7-B.  Per  Pound. 

7-C.  Per  Piece. 

7-D.  Per  Cent  of  Cost. 

7-E.  Mutual  Satisfaction. 

VIII.  Conclusion. 

The  following  discussion  of  the  above  subjects  is  reprinted  com- 
plete from  Chapters  VII  and  VIII  of  the  author's  "Predetermination 
of  Prices." 

In  the  preceding  chapters  the  various  factors  involved 
as  influencing  the  determination  of  true  costs  and  the  com- 
putation of  estimates  have  heen  considered.  Reference  to 
Fig.  1 6  will  show  a  record  of  five  methods  used  in  determin- 
ing profits. 

The  profit  of  a  business  is  a  variable  circumscribed  by 
very  broad  limits,  l>ecause  the  factors  which  should,  seldom 
control  it.  Scientifically,  profit  can  be  intelligently  figured 
if  it  is  based  upon  correct,  absolute  costs.  It  is  the  writer's 
object  to  show  a  systematic  method,  based  upon  working 
practices,  of  computing  profits  to  suit  each  of  several  actual 
conditions  confronting  a  business  man. 

It  goes  without  saying,  of  course,  that  it  should  be  the 
object  of  every  manufacturer  to  get  as  large  a  margin  of 
profit  as  possible  consistent  with  the  foundation  of  a  per- 
manent business  and  commensurate  with  the  quality  of 
product  to  which  that  profit  applies. 

Prices  should  not  necessarily  be  fixed  by  a  definite  mar- 
gin based  on  the  cost  of  a  job,  but  sometimes  by  the  value 
of  that  job  to  the  consumer.  There  are  cases,  of  course, 
where  the  actual  cost  of  production  is  out  of  all  proportion 
to  the  intrinsic  value  of  the  piece  as  determined  by  ordinary 
standards.  In  such  cases  the  oddity  of  the  job  and  the  com- 
plication of  it  give  a  cost  apparently  out  of  proportion. 

io8 


FREDERIC    A.    PARK  HURST 


/ 


109 


This,  of  course,  is  the  customer's  loss  in  one  sense  of  the 
word  and  he  must  expect  to  reimburse  the  manufacturer  to 
the  full  amount  of  the  cost  plus  a  reasonable  profit. 

In  general,  a  reasonable  profit  should  be  interpreted  as 
meaning  a  profit  based  on  what  is  a  fair  allowance  over 
and  above  the  elements  (direct  and  indirect)  entering  into 
the  cost  of  the  product.  The  author  does  not  believe  that 
there  is  a  first-class  up-to-date  concern  that  will  not  be  will- 
ing to  buy — all  things  being  equal — at  a  price  which  will 
net  the  vendor  a  profit  of,  at  least,  10%.  This  being  the 
case,  the  matter  simmers  down  (on  a  close  competitive  basis 
of  price  fixing)  to  a  certain  amount  added  to  the  total  cost 
of  the  work  including  all  items  of  cost  (direct  and  indirect) 
based  on  an  honest  distribution  of  overhead  or  burden. 
This  10%  may  be  added  to  the  total  cost  of  the  job,  as 
shown  by  the  cost  summary,  which,  of  course,  must  include 
all  differential  burden,  both  hourly  and  pound. 

The  fact  should  not  be  lost  sight  of  in  adding  profit  to 
determine  a  selling  price,  that  under  the  science  of  manage- 
ment a  firm  has  more  to  sell  than  its  visible  product.  It  has 
engineering  and  technical  ability  to  put  at  the  customer's 
disposal.  It  has  service  in  the  broadest  sense  of  the  word. 
It  assures  quality  and  maximum  production.  All  these 
factors  guarantee  positive  and  definite  shipping  schedules. 
They  make  it  possible  to  not  only  sustain  the  prevailing 
prices,  but  to  work  toward  an  automatic  adjustment  of 
prices  based  on  the  "value  received"  by  the  buyer. 

7-A.  Per  Preductive  Hour 

In  the  majority  of  business  the  writer  prefers  the  method 
of  basing  profit  upon  the  productive  hour  except  in  cases 
where  necessity  makes  some  other  basis  apparent.  It  is 
just  to  assume  that  with  a  given  plant  and  investment 
running  under  fairly  normal  conditions,  a  certain  net  profit 
should  be  realized.  Of  course  the  figure  depends  on  the  shop 
conditions  and  the  kind  of  work  handled,  but  any  invest- 
ment should  realize  for  the  owners  a  fair  percentage  of 
profit  after  all  items  of  depreciation,  expense  of  operation, 


a  >  • 


m 


i! ; 


i 

III 


hi 


IIO 


PER    POUND 


reserve  charges,  etc.,  have  been  taken  care  of.  It  should  be 
borne  in  mind  that  the  net  earning  in  dollars  and  cents 
which  capital  desires  to  realize  also  represents  a  certain 
working  capacity.  This  capacity  can  be  brought  down  to 
a  figure  representing  productive  hours.  These  productive 
hours  divided  into  the  amount  representing  the  desired  earn- 
ing capacity  gives  the  rate  per  productive  hour  to  figure  as 
a  profit.  Such  an  hourly  profit  figure  is  then  used  in  connec- 
tion with  costs  and  estimates. 

If  one  realizes  that  the  entire  basis  of  production  and 
payment  is  time,  one  expects  to  earn  in  a  given  time  a  net 
amount  of  profit  amounting  to  a  certain  figure.  The  profit 
must  be  earned  by  the  expenditure  of  so  much  direct  time 
to  turn  out  that  product. 

In  figuring  the  profit  on  a  basis  of  so  much  per  productive 
hour,  it  is  assumed,  of  course,  that  the  indirect  expense 
covers  everything  in  connection  with  miscellaneous  ma- 
terials, bad  accounts,  etc.  The  productive  hour  basis  of 
figuring  profit  represents  a  net  profit  for  every  direct  hour 
of  work  applying  on  the  job. 

7-B.  Per  Pound 

The  pound  basis  of  figuring  profit  is  applicable  to  cer- 
tain lines  of  business  where  the  percentage  of  labor  is  small 
and  where  the  logical  unit  to  use  is  pounds  or  tons.  This 
method  is  the  most  commonly  used  in  computing  estimates 
and  profits  in  the  average  foundry  business.  Personal  ex- 
perience forces  me  to  consider  it  an  entirely  erroneous 
method  to  use  in  connection  with  foundry  work.  If  profit 
is  figured  on  such  a  basis,  the  same  error  occurs  that  is 
developed  by  the  distribution  of  indirect  expense,  exclu- 
sively, on  a  pound  basis.  Many  foundry  jobs  require  a 
great  many  hours'  labor  to  get  out  a  comparatively  small 
tonnage,  while  others  require  very  little  labor  to  get  out  a 
very  large  tonnage.  It  is  not  safe  to  rely  entirely  on  profit 
at  so  much  per  pound. 

The  profit  on  foundry  work  in  the  majority  of  cases, 
assuming  the  average  variety  of  work  with  its  many  fluctua- 


i 


FREDERIC    A.    PARKHURST 


III 


tions  and  variations,  should  be  figured  on  a  basis  of  so 
much  profit  for  each  direct  hour  expended  on  each  indi- 
vidual job.  It  is  true  that  some  figure  might  be  included 
as  a  small  factor  on  the  pound  basis.  This  should  only  be 
used,  however,  to  compensate  for  some  variation  which 
could  be  corrected  only  by  the  use  of  a  pound  factor. 

7-C.  Per  Piece 

The  determination  of  profit  on  a  basis  of  so  much  per 
piece  is  the  logical  method  to  use  in  cases  where  the  pro- 
duction is  one  in  which  the  logical  unit  of  measurement  is 
piece.  The  ratio  would  need  to  be  a  fairly  constant  one, 
however.  Assume  a  condition  where  a  concern  is  making 
but  one  or  a  very  few  diflferent  articles,  where  the  produc- 
tion is  large  and  the  labor  fluctuation  is  small,  then  a  piece 
profit  may  be  a  logical  method  to  use.  In  other  words,  if 
the  desired  profit  on  a  certain  volume  could  be  as  well 
figured  at  so  much  per  piece,  and  the  piece  unit  is  the  con- 
ventional term  to  apply  to  that  product,  then  it  is  logical 
to  figure  profit  at  so  much  per  piece. 

In  considering  the  use  of  the  piece  profit  understand 
that  the  method  is  recommended  only  where  no  complica- 
tion occurs,  from  the  possible  changes  in  product,  which  is 
involved  by  a  number  of  kinds  or  sizes  of  pieces.  In  a 
business  where  the  production  is  controlled  in  a  large  meas- 
ure by  automatic  or  semi-automatic  machines,  where  the 
labor  ratio  is  low,  the  piece  basis  of  figuring  profit  is  a 
logical  one. 

7-D.  Per  Cent  of  Cost 

This  basis  has  certain  advantages,  particularly  when  ap- 
plied to  miscellaneous  or  experimental  work  which  does  not, 
perhaps,  represent  any  part  of  a  certain  line  of  product. 
Even  then  the  fact  must  not  be  lost  sight  of  that  a  large 
fluctuation  in  direct  hours  on  various  jobs  is  after  all  the 
chief  factor  in  work  of  such  kind.  It  is  probable  that  the 
per  cent  of  cost  should  more  often  be  used  in  conjunction 
with  the  hour  method,  so  as  to  cover  a  percentage  of  profit 
on  quantities  of  material  purchased  for  these  special  and 


i; 


112 


PER  CENT  OF  COST 


r;'"  I 


experimental  jobs.  On  this  class  of  work  there  is  a  certain 
expense  directly  incurred  in  connection  with  purchases,  stor- 
ing, handling  of  material  and  the  carrying  of  accounts  for 
such  material  not  part  of  a  regular  stock  on  which  it  is 
fair  to  add  a  small  percentage  of  the  cost.  This  percentage 
may  be  figured  exclusively  on  the  material.  Then  the  direct 
productive  hour  profit  could  be  added  as  the  regular  profit 
rate,  thus  taking  care  of  the  large  volume  of  direct  labor 
involved. 

There  will  be  cases  where  there  is  some  advantage  in 
using  a  combination  of  several  methods  of  determining 
profit.  As  suggested  in  the  preceding  paragraph,  the  com- 
bination of  a  per  cent  and  a  productive  hour  basis  is  often 
desirable.  On  the  other  hand,  the  indirect  expense  items 
going  to  make  up  burden  and  which  are  charged  into  the 
cost  in  any  event,  ordinarily  take  care  of  all  items  of  cost 
affecting  the  handling  of  material,  carrying  of  doubtful  and 
bad  accounts,  etc. 

7-E.  Mutual  Satisfaction 

It  is  a  well-known  fact  that  a  great  many  commodities 
are  sold  on  the  established  market  prices.  Supply  and  de- 
mand ordinarily  determine  the  market  price  on  a  great 
many  commodities  and  materials.  The  difference  between 
the  available  market  price  and  the  cost  of  the  article  to  the 
producer  ready  to  ship  represents  a  margin  of  profit  which 
in  one  sense  can  be  described  as  a  mutual  satisfaction  profit. 

The  term  "Mutual  Satisfaction"  more  particularly,  how- 
ever, applies  to  cases  where  a  patented  article  is  sold  at  a 
price  a  great  many  per  cent  higher  than  the  true  cost  of 
it  to  the  manufacturer.  On  the  other  hand,  the  article  in 
question  has  a  value  to  the  customer  regardless  of  what  it 
cost  the  manufacturer.  If  an  article  is  manufactured  for 
$1  and  can  be  sold  for  $2.00  or  $2.50,  and  the  customer 
is  perfectly  willing  and  glad  to  pay  $2.50  for  it,  the  margin 
of  $1.50  represents  a  mutually  satisfactory  profit. 

There  are  many  special  machines  which  have  cost  a  great 
deal  to  develop,  selling  at  a  price  which  apparently  repre- 


FREDERIC    A.    PARKHURST 


113 


sents  a  very  large  margin  of  profit  over  the  total  cost  to 
the  manufacturer.  On  the  other  hand,  the  purchase  of  such 
a  machine  enables  the  purchaser  to  turn  out  his  product  very 
much  cheaper  than  he  could  otherwise  do;  and  he  is  only 
too  glad  to  buy  at  a  price  which  allows  the  manufacturer 
of  the  machine  a  very  large  margin.  Mutual  satisfaction 
is  undoubtedly  the  best  term  to  use  in  describing  this 
method  of  determining  profit.  After  all,  a  satisfactory  and 
fair  price  is  one  which  both  vendor  and  purchaser  mutually 
agree  upon  in  a  transaction  between  two.  If  both  are  con- 
tent there  can  l)e  no  logical  argument  against  such  a  method. 

It  is  not  the  intention  to  suggest  or  advise  the  asking  of 
an  exorbitant  profit,  just  because  the  product  is  one  which 
the  other  fellow  cannot  buy  elsewhere.  If  a  vendor  charges 
an  exorbitant  margin  of  profit,  he  is  inviting  a  competition 
which,  though  it  may  involve  expensive  designing  and  the 
invention  of  new  methods,  will  eventually  lead  to  getting 
on  the  market  an  article  to  compete  with  his.  Competition 
is,  of  course,  a  good  thing.  At  the  same  time  there  is  a 
limit,  and  the  average  manufacturer  will  find  that  he  ordi- 
narily has  more  to  gain  by  not  getting  the  habit  of  charg- 
ing exorbitant  prices  than  he  has  by  trying  to  boost  values 
beyond  a  fair  limit.  A  good  safe  margin  of  ])rofit  which 
shall  amply  protect  against  times  of  bad  business,  so  mak- 
ing the  average  a  fair  one,  is  a  much  better  policy  and  will 
result  in  a  more  permanent  and  staple  business. 

A  i^urchaser  is  better  satisfied  to  buy  a  product  netting 
the  manufacturer  a  good  margin  of  profit,  when  that  manu- 
facturer bases  his  profit  on  accurate  costs.  A  complete 
method  of  detailed  distribution  of  costs  permits  the  manu- 
facturer to  charge  to  his  orders  a  fair  margin  of  profit, 
equally,  on  practically  all  of  his  product.  One  firm  is  not 
paying  an  exorbitant  profit  on  his  order  to  offset  the  loss 
on  another  firm's  order.  There  is  a  great  deal  of  business 
being  handled  in  these  days  at  a  loss,  because  the  manu- 
facturer does  not  know  how  much  one  article  costs  as  com- 
pared to  others.  If  he  doesn't  know  the  individual  cost  of 
an  article  how  can  he  lower  the  cost  on  the  unprofitable 
article? 


u 


.11 


1 


114 


MUTUAL  SATISFACTION 


As  first  stated  in  these  pages,  it  is  not  sufficient  to  know 
weeks  after  a  job  has  been  completed  how  much  it  will  cost 
and  how  much  you  can  sell  it  for.  This  information  should 
ahvays  be  at  hand  within  a  very  close  limit  of  variation 
before  the  order  is  placed  on  the  books.  If  the  methods 
described  here  are  followed,  the  result  will  be  a  very  marked 
change  in  the  figures  representing  the  cost  of  various  arti- 
cles produced.  Some  of  the  supposedly  profitable  product 
will  be  found  to  be  exceedingly  unprofitable,  and  that  part 
which  was  supposed  to  be  unprofitable  may  be  found  to  be 
most  desirable.  In  any  event,  the  net  result  of  the  rear- 
rangement will  be  a  set  of  figures  which  will  represent  true 
cost.  These  true  costs  plus  a  fair  margin  of  profit  will 
result  in  a  relatively  true  selling  price. 

A  firm  no  longer  needs  to  bid  at  so  much  a  piece,  or  so 
much  a  pound,  or  name  such  and  such  a  price  for  an  article 
because  it  thinks  competitors  are  going  to  quote  approxi- 
mately so  much.  Too  often  prices  are  quoted,  based  on  the 
assumption  that  a  competitor  will  hold  to  a  certain  figure 
and,  "if  we  want  the  business  we  had  better  quote  about 
so  much  less."  A  firm  knowing  its  true  costs  and  selling 
prices  need  never  be  afraid  of  quoting  any  selling  price 
regardless  of  what  he  thinks  the  other  fellow  may  quote  in 
competition.  No  good  business  concern  wants  to  buy  an 
article  because  it  can  buy  it  the  cheapest  as  far  as  the  face 
price  of  it  is  concerned.  What  the  customer  wants  is  good 
service.  He  is  willing  to  pay  a  price  that  will  allow  the  firm 
giving  that  guarantee  of  service  a  living  profit.  The  firm 
deciding  to  quote  by  guess-work  methods  may  have  some 
luck  for  a  while,  but  must  somehow,  sometimes,  shirk 
something  to  "break  even"  on  guess-work  prices. 

"All  is  not  gold  that  glitters."  Analyze  your  product. 
Know  your  costs.  The  firm  having  true  costs  data  at  their 
command  need  never  fear  competition,  providing  they  real- 
ize soon  enough  that  they  must  also  have  a  competent,  pro- 
gressive, and  up-to-date  sales  organization  with  confidence 
in  its  prices.  Without  the  latter,  their  true  costs  and  rela- 
tively true  selling  prices  will  avail  them  little. 


FREDERIC    A.    PARKHURST 


8— Conclusion 


115 


This  book  covers  what  is  probably  the  most  vital  branch 
of  any  business.  Without  true  costs  on  which  to  base  sell- 
ing prices,  the  stability  of  any  business  is,  to  say  the  least, 
uncertain.  The  reader  must  not  for  a  moment  imagine  that 
the  definition  of  the  word  cost  as  the  author  uses  it  is  that 
limited  by  the  dictionary.  In  other  words,  we  should  not 
continually  strive  toward  lower  relative  costs  at  the  expense 
of,  nor  to  the  knowing  detriment  of  our  fellow-worker  or 
employee. 

Today  we  no  longer  associate  the  lowest  cost  with  the 
least  output  in  wages.  In  establishments  employing  the 
most  modern  methods  involved  in  the  science  of  manage- 
ment the  lowest  costs  are  realized  when  the  remuneration 
to  the  employee  reaches  the  peak.  Nor  is  the  cold-blooded 
comparision  of  facts  and  figures  the  only  measure  of  value. 

Modern  striving  for  low  costs,  which  under  proper  and 
scientific  management  pays  the  highest  wage,  has  resulted 
in  the  improvement  in  a  marked  degree  of  working  condi- 
tions, as  well  as  in  the  personnel  itself.  It  is  true  that 
many  of  the  physical  improvements  in  factory,  equipment, 
tools,  safeguarding  life  and  limb  brought  out  in  recent 
years  have  often  been  prompted  by  selfish  motives.  On  the 
other  hand,  this  work  is  becoming  more  and  more  general 
from  a  strictly  humanitarian  standpoint. 

We  cannot  overlook  the  personal  factor.  We  realize  as 
time  goes  on  that  the  satisfied  and  well-paid  worker  has  an 
economic  influence  which  far  exceeds  his  direct  monetary 
value  to  his  employer.  The  highly  paid  workman  has  a 
highly  stimulated  interest  in  his  work.  He  becomes  a 
thinker.  Being  a  thinker,  he  becomes  better  able  to  dis- 
criminate between  what  is  good  for  him  and  that  which 
is  likely  to  prove  detrimental.  To  continue  his  high  pay, 
he  continues  to  care  for  himself.  His  opportunities  are 
greater.    He  lives  better  and  does  more  for  his  family. 

Other  effects  of  this  higher  pay  to  the  workman  come 
from  his  desire  to  better  educate  his  children  and  become  a 
better  citizen.     He  spends  more  and  he  saves  more.     As 


L 


ii6 


CONCLUSION 


If: 


he  begins  to  realize  these  things  and  what  these  changes 
mean,  he  becomes  a  potent  economic  factor  in  pubHc  hfe. 
His  work  is  more  productive,  as  he  does  more  of  a  better 
quahty.  He  co-operates  with  his  employer  and  his  em- 
ployer's organization.  In  other  words,  he  is  more  or  less  a 
partner  in  the  business  in  that  he  gets  a  special  extra  remun- 
eration for  his  cost  reducing  value,  and  he  gets  it  in  cash 
every  week  with  no  questions  asked.  His  bonus  increases 
as  his  efficiency  increases. 

All  of  the  foregoing  has  its  direct  effect  on  costs.  Not 
because  of  the  fewer  hours  spent  to  do  a  piece  of  work. 
Far  more  important  is  the  moral,  harmonious  and  coopera- 
tive influence  of  an  efficient  individual  in  an  organization. 
Only  by  such  a  condition  can  control  be  obtained  of  all  the 
elements  entering  into  costs. 

Economical  operation  and  low  cost  means  the  maximum 
efficiency  in  output  of  energy,  high  wages,  and  a  conser- 
vation of  material  and  labor.  A  dollar  saved  is  lOO  per 
cent,  profit.  A  one  dollar  order  from  a  customer  may  mean 
ID  cents  or  15  cents  (10%  to  15%)  profit.  In  the  future 
the  successful  business  will  begin  its  economy  by  eliminat- 
ing wastes  rather  than  by  cutting  wages  and  the  sum  total 
of  expenditures  for  a  given  output  will  become  the  objective 
point  of  attack  from  which  to  eliminate. 

Goethe  said,  "If  the  world  is  not  governed  by  figures, 
they  at  least  show  how  the  Avorld  is  governed."  If  the 
American  business  man,  with  his  command  of  unlimited 
and  unexcelled  resources  of  practical  thought,  capital, 
equipment  and  energy,  will  govern  his  industrial  world  by 
"true"  figures  and  not  guess  work,  his  supremacy  and  that 
of  the  American  workman  will  be  impregnable. 


LECTURE  XX 


THE  TOOL  ROOM 

6-A.  The  Standardization  of  Methods  and  Tools. 

XXVIII.  Instruction  for  Tool  Foreman. 

XXIX.  Instruction  as  to  Tool  Requirements. 

XXX.  Instruction  for  Care  and  Storage  of  Tools. 

This  lecture  will  discuss  the  details  incident  to  the  standardization 
of  methods  and  tools  under  section  6-A.  forming  part  of  Chapter  VI  of 
the  text. 

The  three  instructions  above  noted  will  also  be  discussed  in  detail 
and  will  be  found  in  the  Appendix  of  the  text 


117 


\.l 


6-B. 
6-C. 


LECTURE  XXI 


MANUFACTURING  AND  ERECTING 

The  Development  of  a  Manufacturing  System. 
The  Handling  of  Erection  Work. 


The  above  subjects  will  be  discussed  in  detail  following  Chapter 
VI  of  the  text,  with  additional  discussion  of  the  work  in  other 
factories. 


LECTURE  XXII 


TIME  STUDY  AND  BONUS 

7-A.    Introduction  of  Time  Studies. 

7-B.    Analysis  of  Time   Studies  and  the  Development  of   In- 
.STRucTioN  Cards. 

The  above  subjects  will  be  discussed  as  outlined  in  Chapter  VII  of 
the  text,  so  as  to  follow  the  organization  lineup  at  the  Ferracute  Ma- 
chine Company. 


V 


ii8 


119 


i 


7-C. 
7-D. 


LECTURE  XXIII 
TIME  STUDY  AND  BONUS  ( Continued) 

Discussion  of  Piece  Work,  Premium,  Bonus,  Differential 
Rate  and  Differential  Bonus  Systems  of  Wage  Payment. 

Method  used  by  the  Author  to   Compute  Differential 
Bonus. 


i 


This  lecture  will  discuss  the  two  remaining  parts  of  Chapter  VII 
of  the  text,  completing  the  study  of  this  part  of  the  subject  as  applied 
to  the  Ferracute  Machine  Co. 


:  ■  "'; 


n 


I 


1 20 


LECTURE  XXIV 

TIME  STUDY  AND  BONUS  (continued) 

9.    The  Control  of  Methods  and  Labor  through  Time  Studies 
AND  Sub-Operation  Times. 

10.    Time  Study  Foreman. 

This  lecture  will  discuss  in  further  detail  the  work  necessary  inci- 
dent to  time  study  and  bonus  as  indicated  by  the  two  above  mentioned 
divisions  which  are  reprinted  complete  from  the  author's  "Scientific 
Management  in  the  Foundry,"  sections  9  and  10. 

The  discussion  of  the  subject  in  this  lecture  will  cover  considerably 
more  detail  than  did  the  preceding  lectures  on  the  same  subject  and 
will  also  give  the  student  an  idea  of  the  elements  involved  in  the  study 
of  foundry  methods. 

9 — ^The  Control  of  Methods  and  Labor  Through  Tin*e 
Studies  and  Standard  Sub-Operation  Times 

All  of  the  above  mentioned  pre-requisites  have  their  value 
as  a  part  of  the  whole.  The  actual  savings  they  effect  are 
very  great,  but  we  come  now  to  the  most  radical  part  of  real 
scientific  management,  that  part  which  helps  us  immensely 
in  the  development  of  all  the  branches  of  management  that 
have  been  mentioned  earlier  in  this  article  and  that  part 
which  makes  possible  a  larger  production  than  is  otherwise 
obtainable. 

Fundamentally  we  must  obtain  a  thorough  knowledge  of 
all  factors  in  a  condition  to  scientifically  control  it.  To  do 
this  we  must  first  care full5?  analyze  each  thing  we  have  to 
do  into  all  its  elements.  Having  done  this  the  next  step  is 
to  take  up  each  branch  or  element  individually  and  one  at  a 
time.  The  chief  element  aside  from  material  in  foundry 
work  is  labor. 

The  control  of  methods  and  the  necessary  labor  element 
are  closely  related.  In  one  sense  the  method  is  distinct 
from  the  labor  necessary  to  make  that  method  effective.  On 
the  other  hand  we  cannot  dispense  with  the  labor.  Our 
method  may  contemplate  the  most  complex  and  efficient 

121 


► 


122 


CONTROL  OF  METHODS  AND  LABOR 


mechanical  appliance,  leaving  but  little  for  the  human  ele- 
ment to  do  to  realize  great  pro<luctiveness  from  it.  Yet, 
to  repeat,  we  are  helpless  without  the  human  factor. 

In  the  perfection  of  methods  we  bring  to  bear  specially 
trained  minds.  The  material  and  tools  to  be  used  are  care- 
fully determined.  The  proper  combinations  of  help  (if  it  is 
gang  job)  are  agreed  upon.  So  too  are  the  sequence  of 
operations  and  the  time  each  shall  take.  All  of  these  factors 
are  determined  by  careful  study  combined  with  the  use  of 
the  stop  watch. 

To  best  describe  the  author's  method  of  making  time 
studies  he  gives  below  a  modified  copy  of  a  set  of  instruc- 
tions covering  the  duties  of  a  time  study  foreman.  This 
instruction  applies  to  a  man  in  charge  of  time  study  work 
in  one  of  the  large  foundries  in  which  the  author  is  install- 
ing his  methods  of  scientific  management.  A  large  amount 
of  detail  applying  to  that  particular  business  has  been 
omitted  for  obvious  reasons.  The  author  hopes  that  the 
following  will  impress  the  reader  with  the  great  importance 
of  this  part  of  the  work.  Time  study  work  well  done  is 
the  key  to  the  success  of  the  entire  scheme.  If  improperly 
or  incorrectly  carried  out  it  is  bound  to  plunge  the  entire 
scheme  of  organization  into  chaos.  The  final  outcome  can 
be  readilv  foreseen. 


10 — ^The  Time  Study  Foreman 

The  Time  Study  Foreman  is  a  member  of  the  planning 
room  force.  He  is  a  functional  foreman  and  is  directly 
under  the  Production  Clerk.  Until  the  new  methods  are 
thoroughly  operative,  however,  the  Time  Study  Foreman 
will  be  directly  under  the  Organizing  Engineer  and  will  be 
responsible  to  him  only. 

These  instructions  cover  the  duties  of  the  Time  Study 
Foreman  and  his  one  assistant.  They  are  of  course  equally 
applicable  in  the  event  that  there  are  more  than  two  men 
employed  on  this  work.  The  time  study  men  are  imme- 
diately responsible  to  the  Time  Study  Foreman,  who  will 
be  held  strictly  responsible  for  all  branches  of  their  work. 


FREDERIC    A.    PARKHURST 


123 


I 


This  also  applies  to  men  detailed  temporarily  from  other 
plants  for  instruction  in  time  study  work. 

Too  much  stress  cannot  be  laid  on  the  importance  of 
the  w^ork  covered  by  these  instructions.  This  applies  both 
to  the  relative  importance  of  this  branch  of  the  work  to  the 
entire  organization  as  well  as  to  the  fact  that  it  is  the  most 
important  single  element  of  the  whole.  The  success  of  the 
entire  bonus  system  is  dependent  on  the  reliability  of  the 
work  of  the  Time  Study  Foreman  and  his  assistants,  and  in 
the  accuracy  of  their  investigations  and  records. 

The  observer  or  time  studv  man  should  be  a  skilled  man 
of  the  trade  under  investigation.  It  is  not  absolutely  neces- 
sary that  he  be  the  fastest  worker  in  the  shop,  but  he  must 
be  one  of  the  best.  Pride  and  enthusiasm  in  his  work  are 
two  of  the  chief  essentials.  To  these  may  be  added  sound 
judgment  and  an  unbiased  mind,  and  above  all  things,  he 
must  be  patient,  exacting  and  extremely  diplomatic.  Many 
opportunities  will  arise  for  carrying  tales.  Care  must  be 
taken  in  conversation  with  the  men  that  nothing  is  said 
which  can  be  misconstrued.  These  things  make  trouble  and 
must  be  absolutely  avoided.  A  man  who  cannot  observe 
these  regulations  will  not  be  allowed  to  have  anything  to  do 
with  time  study  or  bonus  work. 

The  time  study  men  must  study  the  man  as  well  as  the 
job.  They  must  win  and  retain  the  confidence  of  those 
with  whom  they  come  in  contact.  The  time  study  men  are 
functional  foremen  in  every  sense  of  the  word.  As  such 
they  come  in  contact  sooner  or  later  and  more  or  less  often, 
with  every  workman  in  the  shop. 

The  observer  when  making  a  time  study,  should  be  sure 
to  fill  in  all  the  information  required  at  the  top  of  the  time 
study  form,  as  indicated  by  the  printed  matter.  The  Sub- 
stance of  t\\e  "note'*  at  the  top  of  this  form  should  always 
be  borne  in  mind.  Each  job  must  be  carefully  and  thor- 
oughly analyzed  into  its  various  elements.  The  best  se- 
quence of  operations,  as  well  as  the  proper  tools,  feeds, 
speeds  and  cuts  (if  a  machine  job)  must  be  determined  be- 
fore the  study  is  completed.     This  is  a  most  important 


124 


TIME    STUDY    FOREMAN 


'*'  t 


record  and  must  always  be  complete  in  itself  for  later  ref- 
erence. 

First  of  all  there  are  a  great  many  standard  elemental 
times  to  be  determined  and  tabulated  for  us  in  connection 
with  time  studies  and  instruction  cards.  These  elements 
occur  repeatedly  on  all  work  of  whatever  nature  which  may 
be  done  in  the  different  types  of  machine  or  by  hand.  Once 
determined,  they  represent  a  standard  to  be  used  in  the 
future  for  that  particular  machine  or  group  of  like  machines 
or  other  equipment.  In  addition  to  the  above,  full  data 
must  be  tabulated  covering  all  details  of  capacity,  power, 
adaptability,  etc.,  of  each  machine,  maximum  feeds,  cuts, 
speeds,  etc.  Other  elemental  times  are  also  necessary  to 
the  expediting  and  standardizing  of  this  work.  For  ex- 
ample, standard  time  allowances  for  setting  different  kinds 
of  work  in  different  types  of  machines,  different  sizes  and 
styles  of  clamps  and  bolts,  time  needed  to  raise  different 
weights  from  floor  to  machine,  both  by  hand  for  small  parts, 
and  by  crane  or  hoist  for  larger  ones.  Different  trades,  of 
course,  all  Jiave  different  elemental  operations. 

All  of  these  elemental  times  represent  a  much  larger  pro- 
portion of  a  man's  daily  work  than  any  one  would  at  first 
imagine.  Although  the  class  of  work  being  done  in  a  shop 
may  vary  greatly,  both  in  sizes  and  shapes,  a  great  deal  of 
a  man's  time  is  consumed  daily  in  doing  the  same  thing 
over  and  over  again.  This  statement  applies  to  getting 
tools,  starting  and  stopping  his  machine,  setting  and  unset- 
ting  tools,  making  adjustments,  performing  hand  opera- 
tions, etc.  Until  an  actual  record  has  been  made  of  the  time 
so  consumed,  and  this  record  compared  with  the  time  the 
same  operations  should  take  as  proved  by  stop-watch  obser- 
vations, no  one  will  be  convinced  of  the  true  state  of  affairs. 
The  analysis  of  new  work  into  its  elements  then  becomes  a 
mere  matter  of  applying  standard  elementary  times  to  most 
of  the  elements  and  calculating  or  observing  the  times  for 
the  remaining  few. 

Before  starting  to  make  a  time  study,  the  right  work- 
man must  be  chosen  for  the  job.     He  must  be  a  fast  and 


FREDERIC    A.    PARKHURST 


125 


} 


conscientious  worker  and  skilled  at  the  kind  of  work,  or 
branch  of  the  trade,  under  investigation.  If  such  a  man  is 
not  available,  and  a  "green"  man  is  to  be  broken  in,  the  ob- 
server must  demonstrate  the  various  elements  as  the  study 
progresses.  First  of  all  (other  conditions  being  propitious), 
the  man  chosen  to  do  the  job  must  be  one  who  is  strictly 
loyal  and  thoroughly  in  sympathy  with  the  new  methods. 
Having  chosen  such  a  man,  it  is  generally  good  practice  to 
pay  him  25  per  cent  of  his  hourly  rate  as  a  bonus  for  follow- 
ing instructions  anad  while  working  under  the  watch.  This 
payment  should  only  apply  as  long  as  he  continues  to  con- 
scientiously do  the  best  he  can  to  assist  toward  an  accurate 
and  fair  time  study  of  the  job  in  question.  After  a  number 
of  different  men  have  become  accustomed  to  working  under 
the  watch,  this  25  per  cent  bonus  should  be  regularly  paid 
to  each  man  when  working  under  these  conditions. 

It  will  be  somewhat  difficult  at  first  to  win  the  operator's 
good  will  and  hearty  co-operation.  When  it  is  made  clear 
to  him  that  there  are  many  elements  in  the  job  which  can 
be  improved,  such  as  a  different  way  of  rigging  up  the  job 
in  the  first  place,  or  certain  combinations  of  speeds,  feeds 
and  aits,  and  that  he  has  a  chance  of  earning  from  20  per 
cent  to  40  per  cent  more  wages  under  the  new  scheme,  you 
have  then  brought  home  to  him  wherein  he  is  to  benefit.  His 
work  will  at  once  become  more  interesting;  hence,  he  can 
do  much  more  work  with  less  fatigue.  A  man's  mental  con- 
dition and  environment  are  two  factors  which  exert  a  most 
far-reaching  influence  on  his  output.  His  own  and  the 
employer's  interest  both  require  that  these  two  factors  be 
given  careful  consideration.  Under  these  conditions  each 
man  is  enabled  to  stand  on  his  own  feet.  He  is  assured  of 
the  remuneration  that  is  commensurate  with  his  ability.  He 
will  not  be  wholly  subject  then  to  a  prevailing  rate  of  wages, 
which  in  so  many  cases  is  most  unjust  to  both  employe  and 
employer. 

Having  chosen  the  man,  the  job  must  be  studied  and  an- 
alyzed. This  may  require  much  experimenting  by  trying 
out  one  method  after  another.    The  tools  and  fixtures  to  be 


lih 


li 


I 


m 


1^  f: 

m 


t, 


1::  '■ 


.!? 


y 


126 


TIME    STUDY    FOREMAN 


used  must  also  be  determined  and  listed  so  that  for  future 
repeat  orders  the  proper  tools  may  be  made  ready  in  the  tool 
room  and  moved  to  the  machine.  This  should  be  done  in 
advance  of  the  time  the  job  is  scheduled  to  start.  The  ma- 
terial must  also  be  on  the  floor  or  at  the  machine  or  job. 

In  making  a  time  study,  every  distinct  sub-operation  must 
be  timed  separately.  All  time  is  expressed  in  minutes  and 
decimals  on  the  time  study  form  (see  Fig.  6)  after  which 
the  time  is  transposed  into  hours  and  decimals  and  figured 
to  the  nominal  production  per  nine-hour  day.  Operation 
times  that  are  too  short  to  be  accurately  timed  individually 
may  be  calculated.  This  may  be  done  by  taking  the  time  for 
say  four  sub-operations,  then  by  deducting  the  time  taken 
for  three  to  get  the  time  for  one.  As  the  study  progresses, 
all  unnecessary  time  should  be  noted  and  deducted.  This 
includes  time  lost  due  to  a  man's  too  slow  movements,  wait- 
ing for  or  preparing  tools,  as  well  as  delays  from  any  other 
source  not  necessary  to  the  proper  performance  of  the  work. 

After  the  work  is  under  way,  several  time  studies  from 
different  pieces  of  the  same  lot  (if  there  are  more  than 
one)  should  be  made  on  the  one  form.  Three  columns  are 
provided  for  this  purpose.  In  addition  the  column  to  the 
right  is  to  be  filled  in  showing  the  time  that  is  finally  decided 
on  for  each  sub-operation.  Eventually  all  elemental  times 
w^ill  be  standard  and  the  times  shown  for  them  on  the  time 
study  form  will  be  ignored  except  to  account  for  much  waste 
time.  Ten  or  twelve  sheets  are  often  required  for  one  piece, 
or  job,  if  it  be  a  large  or  intricate  one.  The  time  study 
when  completed  will  show  all  the  detail  times,  equal  in 
amount  to  the  total  elapsed  time.  It  must  be  borne  in  mind 
that  each  study  is  based  on  a  certain  design  of  piece,  made 
of  a  certain  material,  using  specified  equipment  and  tools, 
and  is  not  to  apply  if  one  or  more  conditions  are  changed. 
The  man,  however,  is  the  variable  factor. 

The  kind  and  quality  of  material  has  also  to  be  taken  into 
consideration.  Lack  of  material  or  faulty  equipment  will 
often  prevent  a  man  from  earning  bonus.  The  difference 
in  quality  of  the  material  is  beyond  the  control  of  the  man, 


FREDERIC    A.    PARK  HURST 


127 


and  if  it  prevents  his  earning  a  bonus,  the  management  must 
expect  to  make  an  adjustment.  No  allowance,  however,  is 
to  be  made  for  delays  in  manipulation  of  the  machine,  work 
or  tools.  A  shut-down  of  the  machine  for  adjustment, 
cleaning,  or  minor  repairs,  will  not  be  allowed  unless  it  is 
shown  beyond  question  that  these  delays  were  in  no  way 
due  to  the  operator.  In  some  cases,  however,  the  job  may 
be  stopped,  due  to  any  of  the  above  mentioned  delays,  and 
the  operator  put  on  other  work.  When  the  job  is  finally 
resumed,  the  total  time  elapsed  while  it  was  being  worked 
on  is  used  in  determining  the  time  per  piece.  It  is  up  to 
the  functional  foreman  to  see  that  the  machine  and  equip- 
ment are  in  proper  shape  before  work  is  started  on  any  job. 

It  must  not  be  assumed  that  it  is  always  an  easy  matter 
to  get  a  sufficiently  accurate  time  study,  and  hence  a  good 
set  of  instructions.  In  point  of  fact,  time  studies  some- 
times have  to  be  made  at  different  times  from  several  suc- 
cessive lots  or  jobs  before  a  satisfactory  instruction  card 
can  be  issued  or  a  bonus  rate  set.  The  time  study  man  must 
often  spend  several  consecutive  days  on  one  job,  before  he 
can  get  a  satisfactory  study.  When  this  has  been  obtained, 
however,  it  is  a  comparatively  easy  matter  to  write  up  the 
instruction  cards.  These  instructions,  when  written,  form 
the  permanent  standard  for  that  operation,  until  a  change 
in  one  or  more  of  its  conditions  necessitates  a  new  one.  The 
record  in  itself  looks  simple,  but  the  preliminary  work  in- 
volved can  be  only  appreciated  by  one  who  has  been  actively 
engaged  in  this  kind  of  work. 

The  reader  must  not  be  misled  in  thinking  that  after 
a  satisfactory  time  study  has  been  taken  and  the  instruction 
card  made  out,  there  is  nothing  more  to  be  done.  As  often 
as  not,  this  point  marks  the  beginning  of  a  more  or  less 
lengthy  period  of  patient  and  systematic  coaching.  In  the 
first  place,  several  different  men  w^ill  probably  work  on  as 
many  successive  lots.  Until  these  men  have  been  thor- 
oughly accustomed  to  bonus  work,  they  will  not  perform 
the  operation  as  fast  as  they  can  eventually.  This  is  true 
also  of  machine  operators  who  perhaps  run  the  same  ma- 


128 


TIME   STUDY    FOREMAN 


I'l' ' 


'i : ': 


ft 
i . 


1^.^;, 


Hi  ; 


hv'i 


I 


chine  from  one  end  of  the  year  to  the  other,  but  on  many 
kinds  of  work.  Most  men  are  more  adept  at  one  class  of 
work  than  they  are  at  another,  even  though  it  is  performed 
on  the  same  machine.  Again,  their  mental  attitude  must 
be  considered.  They  think  that  although  they  can  earn 
ten  or  twelve  cents  an  hour  bonus  on  one  job,  they  can  make 
nothing  on  some  new  job.  All  these  conditions  and  differ- 
ences of  opinion  must  be  met  and  the  employe  instructed  un- 
til he  becomes  proficient  on  each  job  put  to  him  under  bonus. 
This  method  also  results  in  placing  men  at  the  work  they 
are  best  fitted  for.  They  cannot  continue  to  work  indiffer- 
ently for  perhaps  years  when  they  should  have  been  on 
other  jobs  or  working  at  some  other  trade.  The  writer 
has  in  mind  a  number  of  jobs  which  took  from  six  to  four- 
teen months  of  unremitting,  patient  labor  on  his  part  before 
a  cent  of  bonus  was  earned  on  them. 

If  one  or  more  men  do  not  begin  to  immediately  earn 
bonus  after  a  bonus  price  has  been  set,  the  circumstances 
must  be  taken  into  consideration.  They  must  be  given  an 
opportunity  to  appreciate  the  fact  that  the  job  contains  ele- 
ments which  they  were  before  unfamiliar  with.  Make  them 
realize  that  they  have  been  shown  how  they  can  do  the 
work  quickly  if  they  are  so  inclined.  I  quote  an  example 
which  came  up  in  our  core  room  the  other  day,  which  is  a 
particularly  good  illustration  of  this  point.  I  refer  to  a  half 
housing  core,  core  box  3,  for  a  transmission,  bonus  chart 
No.  53.  This  job  had  been  run  under  day  work  from  75 
to  85  cores  a  day  and  in  the  judgment  of  the  foreman  90 
cores  could  be  made  in  nine  hours.  A  time  study  on  this 
job  was  made  personally  by  the  writer  and  afterwards  a 
more  systematic  study  was  made  by  the  Time  Study  Fore- 
man. The  result  was  that  the  job  figured  .83  minutes  per 
core.  Making  an  allowance  of  about  10  per  cent,  the  maxi- 
mum bonus  production  was  figured  on  a  basis  of  0.9  min- 
utes per  core.  This  means  a  production  of  600  cores  per 
day  for  one  man  at  the  bench.  Bonus  was  started  at  70  per 
cent  of  this  production  (420)  and  the  chart  above  referred 
to  was  issued  on  this  basis. 


FREDERIC    A.    PARKHURST 


129 


It  is  a  pretty  radical  proposition  to  take  a  "75  to  90  a 
day"  job  based  on  the  best  judgment  of  the  man  in  charge 
of  that  department  and  attempt  to  jump  it  to  420  before 
the  man  can  earn  any  extra  remuneration.  The  man  who 
had  been  working  on  this  job  refused  to  work  under  bonus 
and  walked  out.  A  strange  man  was  put  on  the  job  and 
for  the  first  day's  work  made  460  cores.  On  the  second  day 
he  made  537.  The  foreman  in  this  department  then  ad- 
mitted that  he  believed  a  man  could  make  600  of  these  cores 
in  nine  hours.  The  job  after  a  few  days  ran  from  550  to 
600  per  day.  This  example  is  recorded  here  as  a  good  illus- 
tration of  the  apparent  radicalism  of  some  of  the  results  de- 
sired under  new  methods. 

Be  perfectly  sure  of  your  facts,  then  instruct  and  assist 
the  men  in  every  way  in  realizing  the  results  you  aim  for. 
Keep  an  accurate  record  of  the  time  you  consume  while 
making  each  time  study  and  if  the  men  are  cooperating  with 
you  and  trying  in  every  way  to  assist  you  in  making  this 
study,  see  that  a  bonus  pay  slip  is  turned  in  for  an  amount 
equal  to  25  per  cent  of  their  wages  for  the  time  they  were 
working  under  the  stop  watch.  Be  perfectly  open  and  frank 
with  them  while  taking  time  studies  and  do  not  get  the  habit 
of  letting  them  think  you  are  taking  time  studies  secretly.  I 
am  not  referring  now  to  making  the  general  superficial 
study  of  the  job  and  taking  the  elapsed  time,  keeping  the 
watch  in  the  pocket.  This  method  is  allowable  under  cer- 
tain circumstances  as  long  as  it  is  done  discreetly  and  just 
as  a  rough  check  on  conditions.  There  are  only  a  few  cases 
where  such  a  method  is  necessary  and  the  writer  knows  of 
none  where  it  is  desirable. 

When  taking  time  studies  or  arranging  the  order  of  work 
and  teaching  the  men  how  to  perform  such  work,  be  sure 
to  make  them  realize  the  advantage  of  working  at  a 
steady  gait.  Do  not  let  the  men  continue  the  habit  which 
a  great  majority  of  them  have;  i.  e.  trying  to  put  up  a 
large  proportion  of  the  day's  work  during  the  morning 
period.  We  have  been  able  to  get  our  men  away  from 
this  habit  and  it  will  be  noticed  that  on  practically  every 


I30 


TIME    STUDY    FOREMAN 


FREDERIC    A.    PARKHURST 


131 


II!: 


m  i 


1" 


iqf 


bonus  job  now  running  an  average  gait  is  maintained 
throughout  the  day.  If  the  jobs  were  checked  over  at  noon, 
you  would  find  that  ahnost  invariably  there  is  5-9  of  a  day's 
work  completed  at  1 1  :^o.  Such  a  condition  is  a  most  de- 
sirable one;  the  men  can  do  more  work  with  less  fatigue 
than  in  any  other  way.  For  general  information,  it  may 
be  mentioned  here  that  there  is  a  certain  limit  to  which  a 
man  can  go  before  becoming  unduly  fatigued.  If  a  very 
short  rest  period  is  taken  at  this  time,  a  matter  of  only  a 
few  moments  even,  it  will  recuperate  a  man  so  that  he  can 
resume  at  his  maximum  speed.  Let  him  work  a  little 
longer,  however,  at  his  maximum  speed  and  it  will  not  re- 
quire a  proportionately  increased  period  of  rest  to  recu- 
perate, but  the  period  will  have  to  be  many  times  longer.  A 
sloiver  average  gait  steadily  maintained  as  above  stated  re- 
quires a  great  deal  less  effort  for  a  greater  production. 

As  each  job  is  taken  up  and  investigated  preparatory  to 
making  a  time  study,  be  sure  to  get  an  accurate  record  of 
how  the  job  is  run,  the  number  of  men,  and  their  rates. 
Also  get  an  accurate  record  of  the  production  per  day  both 
in  gross  work  and  net  amount  of  good  castings,  cores,  or 
whatever  unit  applies  to  the  job.  This  information  is  very 
essential  for  comparative  purposes  as  well  as  to  check  out 
your  cost  after  you  determine  the  new  way  of  arranging 
the  job  combined  with  the  anticipated  production.  Very 
often  it  is  necessary  to  change  a  method  and  at  other  times 
it  is  a  very  undesirable  thing  to  do. 

After  you  plan  the  arrangement  of  a  job  on  the  floor  or 
bench,  be  sure  to  see  that  you  provide  a  sufficient  (juantity 
of  material.  No  matter  how  willing  the  men  they  cannot 
work  to  advantage  (nor  can  you  get  a  satisfactory  study) 
if  the  flow  of  material  is  not  sufficient  to  keep  the  gang 
well  supplied  and  far  enough  ahead  so  that  they  do  not  see 
the  possibility  of  a  tie-up.  You  must  not  forget  that  the 
average  workman  is  very  clever  at  gaging  his  speed  to  suit 
conditions.  Do  not  under  any  circumstances  think  that 
the  men  you  are  dealing  with  are  fools,  especially  if  they  are 
of  a  different  nationality  and  do  not  understand  English. 


You  will  find  that  the  minds  of  such  men  are  peculiarly 
active.  They  are  very  quick  to  see  an  opportunity  and 
take  advantage  of  it.  They  are  also  exceedingly  sensitive, 
far  more  so  than  the  average  better  educated  person. 

Restrict  each  job,  whether  it  is  a  one  man  job  or  a  gang 
job,  to  a  certain  but  sufficient  amount  of  floor,  rack  and 
bench  space.  Be  careful  to  make  your  arrangement  of 
work  such  that  the  different  material  and  equipment  is 
handy  and  can  be  reached  and  manipulated  without  an  un- 
due amount  of  travel  or  useless  motions ;  on  the  other  hand, 
allow  sufficient  room  to  work  to  advantage. 

It  is  a  mistake  (except  perhaps  in  isolated  cases)  to  work 
more  than  two  to  six  men  and  boys  in  a  gang  on  bonus. 
The  individuality  of  each  man  is  lost  and  no  one  in  the 
gang  can  work  to  the  best  advantage  for  several  reasons; 
chiefly  because  men  vary  in  capacity.  When  in  too  large 
a  gang  all  are  not  congenial,  are  apt  to  be  more  or  less 
jealous  and  antagonistic,  or  feel  that  each  one  is  not  doing 
his  share  and  hence  holding  the  others  back.  Work  which 
can  be  done  by  a  large  gang  must  be  so  divided  into  sections 
that  each  section  can  be  handled  as  a  unit  by  one  or  two 
men.  The  result  is  the  equivalent  of  a  number  of  small 
individual  units  or  jobs  which  at  a  certain  stage  of  comple- 
tion, are  themselves  assembled  in  a  short  time,  and  perhaps 
by  a  number  of  men,  into  the  completed  work.  In  a  case 
of  this  kind  each  unit  or  section  is  inspected  separately  as  its 
assembling  progresses.  The  final  inspection  takes  place 
after  the  work  is  complete. 

In  the  capacity  of  a  time  study  man  be  careful  to  avoid 
any  suggestion  of  usurping  the  authority  of  the  foremen 
or  gang  bosses.  They  fully  understand  the  relation  of  your 
work  to  their  own ;  at  the  same  time  when  you  are  ordered 
to  take  a  time  study  of  a  job,  arrange  with  the  foreman 
and  let  him  formally  turn  the  men  over  to  you.  Very  often 
the  foreman  will  have  good  reasons  for  wanting  to  post- 
pone the  starting  of  such  an  investigation.  These  reasons 
may  be  due  to  promises  that  he  has  made  in  regard  to  his 
work,  or  to  the  fact  that  there  is  some  change  in  equip- 


m 


m 


,'» 


132 


TIME    STUDY    FOREMAN 


ment  being  made,  etc.  Such  factors  should  be  considered, 
but  in  every  case  report  back  to  your  superior.  He  may 
have  more  important  reasons  for  wanting  the  study  to 
start  at  once  than  those  which  have  been  given  you  for  de- 
laying it.  Where  you  have  occasion  to  criticize  or  suggest 
improvements  in  methods  generally  on  jobs  which  you  are 
not  personally  handling,  take  such  matters  up  with  the 
foreman  or  other  proper  authority.  Do  not  give  men  in- 
structions unless  it  is  on  a  job  which  has  been  standard- 
ized. In  such  cases  it  is  up  to  the  Time  Study  Foreman 
and  his  assistants  to  maintain  these  jobs  in  their  standard 
condition. 


LECTURE  XXV 

TIME  STUDY  AND  BONUS  (continued) 

11.  Time  Study  Instructions  in  Detail. 

12.  Standard  Elemental  Sub-Operation  Times  for  Floor  Work. 

13.  Standard  Sub-Elemental  Operation  Times  for  Bench  and 

Squeezer  Work. 

14.  Standard  Miscellaneous  Data. 

15.  General  Instructions  to  Time  Study  Men. 

This  lecture  will  cover  in  detail  the  above  subjects  reprinted  com- 
plete from  the  author's  "Scientific  Management  in  the  Foundry"  sec- 
tions 11  to  15  inclusive,  giving  further  information  as  to  the  applica- 
tion of  these  methods  to  the  foundry  business. 

11 — Time  Study  Instructions  in  Detail 

All  observations  in  the  form  of  time  studies,  either  rough 
superficial  investigations  or  detailed  stop  watch  observa- 
tions are  to  be  recorded  on  the  time  study  form  (see  Fig.  6). 
These  forms  are  to  be  numbered  in  conseaitive  numerical 
order,  commencing  at  i.  Particular  care  must  be  exercised 
when  starting  a  study  on  any  piece  of  work  to  be  sure  that 
all  of  the  information  called  for  by  the  printed  matter  at 
the  top  of  this  form  is  filled  in.  When  more  than  one  sheet 
is  used  in  recording  the  time  study,  these  sheets  must  be 
numbered  and  the  total  number  of  sheets  and  "sheet  num- 
ber" ( —  Sheet,  sheet  — )  filled  in  on  each  sheet  belonging 
to  a  set  of  time  studies. 

As  a  general  word  regarding  time  studies,  the  note 
printed  near  the  top  of  the  time  study  form  should  have 
particular  attention,  namely — 

"The  observer  must  exercise  extreme  care  in  making  time 
studies  to  see  that  the  proper  sequence  of  operations  is  main- 
tained, that  all  unnecessary  operations  or  moves  are  eliminated, 
that  proper  appliances  are  provided  and  if  machine  work,  see 
that  the  proper  and  most  economical  combinations  of  Speed, 
Feed  and  Cut  are  used.  When  time  is  slow,  due  to  man's  natural 
slow  moves,  note  (in  margin  at  extreme  right  below)  what  the 
time  should  be  for  a  fast  man  moving  at  his  best  normal  speed. 
Have  certain  operations  repeated  if  necessary  to  satisfy  yourself 
that  the  time  is  correct  and  continue  to  do  so  until  the  study 
is  satisfactory." 


It 


134 


TIME   STUDY    INSTRUCTIONS 


FREDERIC    A.    PARKHURST 


135 


ii 


The  note  is  printed  on  the  form  so  that  it  may  always  be 
a  continual  brief  reminder  of  the  several  very  important  ele- 
ments to  be  considered  in  connection  with  time  study  work. 
These  are  elaborated  on  in  considerable  detail  below  but  too 
much  emphasis  cannot  be  laid  on  their  importance.  Each 
time  study  or  observation,  whether  one  of  a  series  of  studies 
of  standard  elemental  sub-operations,  or  a  time  study  of 
some  specific  operation  or  job,  should  always  be  conducted 
in  a  systematic  and  routine  manner  and  in  strict  accordance 
with  the  following: — 

.  a—Take  nothing  for  granted,  get  all  the  facts  and  do  not 
jump  at  conclusions;  let  these  facts  lead  you  to  a  conclusion 
and  you  will  seldom  go  wrong. 

b — Prepare  the  heading  on  the  time  study  form  above  re- 
ferred to,  filling  in  all  the  data  called  for. 

c — Use  a  decimal  stop  watch  and  express  all  time  in  minutes 
or  hundreths  of  a  minute  (see  Fig.  7).  For  each  sub-operation 
(note  explanation  in  (d)  make  at  least  3  observations.  The 
first  of  these  observations  should  not  be  made  until  the  job  is 
rigged  up  and  arranged  in  the  manner  in  which  it  is  to  finally 
run,  until  the  men  have  become  thoroughly  familiar  with  what 
is  to  be  done,  and  until  they  have  obtained  a  maximum  amount 
of  dexterity  in  the  manipulation  of  the  work  or  tools.  The  sec- 
ond and  third  observations  should  not  necessarily  follow  con- 
secutively after  the  first.  Sometimes  it  will  be  of  advantage  to 
do  this  and  at  other  times,  it  will  be  better  to  make  the  second 
and  third  observations  at  intervals  of  perhaps  several  days.  The 
conditions  of  the  job  and  its  nature,  as  well  as  other  influencing 
factors  will  settle  this  point. 

The  "average  time"  (for  which  a  column  is  provided)  is  a 
matter  of  calculation  and  can  be  done  after  the  study  is  com- 
plete. Very  often,  however,  it  will  be  necessary  to  fill  in  the 
time  the  job  should  take  (for  which  the  extreme  right  hand 
column  is  provided)  at  the  time  the  three  observations  are  being 
made.  Conditions  govern  this,  but  there  will  be  occasions  when 
there  is  a  definite  loss  of  time  on  a  sub-operation  due  to  certain 
hindrances  which  can  be  corrected  at  the  time  the  observations 
are  being  made.  If  the  correct  time  is  not  noted  immediately, 
it  may  be  overlooked. 

d— Reference  has  been  made  above  to  "sub-operation ;"  it  will 
be  noted  that  on  the  second  line  of  the  heading  of  the  time  study 
form,  the  third  item  is  "operation."  (See  Fig.  6).  Operation 
as  here  used  means  the  general  operation  or  job  under  observa- 
tion. This  general  operation  may  consist  of  a  great  many  sub- 
operations,  some  of  them  being  purely  elemental  and  continu- 
ously repeated,  no  matter  what  the  particular  job  is  that  is  being 
worked  on.  Other  sub-operations  are  special  to  a  particular 
operation  or  job.  This  explanation  is  put  in  here  so  that  the 
words  "operations"  and  '^sub-operations"  will  not  be  confused 


To  further  explain— suppose  we  are  taking  a  time  study  on  a 
molding  operation,  say  for  a  simple  floor  job  conducted  by  one 
man.  The  entire  work  of  making  this  mold  is  an  operation. 
Placing  the  bottom  board,  setting  the  pattern,  dusting  on  parting 
sand,  setting  sprues  and  risers,  setting  flasks,  shifting  the  first 
layer  of  sand,  setting  nails  and  gaggers,  shoveling  sand,  ram- 
ming, striking  off,  etc.,  are  all  "sub-operations"  of  a  "molding 
operation."  A  similar  explanation  is  applicable  to  coremaking, 
knockout,  trimming,  soldering,  etc.,  all  of  which  are  "opera- 
tions."   Note—See  paragraph  (g). 

e — The  next  step  is  to  see  that  the  equipment  which  has  been 
provided  for  the  operation  is  operative  and  arranged  to  the  best 
advantage  on  the  floor,  bench  or  other  place  provided.  It  is 
essential  that  no  more  floor  space  be  devoted  to  a  job  than  is 
necessary  for  the  maximum  amount  of  work;  on  the  other  hand, 
it  is  equally  inefficient,  often  more  so,  to  provide  too  little  space. 
In  work  calling  for  the  co-operation  of  two  or  more  men,  their 
respective  "sub"  or  "part"  (see  g)  based  on  the  time  they  take, 
operations  should  be  so  arranged  that  the  men  can  work  in 
unison  and  with  the  minimum  of  delay.  Be  sure  that  the  tools 
are  in  first  class  condition  and  in  sufficient  quantities,  and  that 
the  man  knows  how  to  handle  them.     (See  m). 

If  the  best  arrangements  cannot  be  determined  beforehand, 
make  experiments  enough  to  determine  this  point  beyond  ques- 
tion before  proceeding  further.  In  such  cases,  see  that  your 
time  study  form  shows  an  explanation  of  what  this  arrange- 
ment should  be.  This  may  be  written  in  the  body  of  the  form 
in  the  column  headed  "detail  description  of  operations,  speed, 
cuts,  etc." 

f — Having  arranged  the  above-mentioned  preliminaries,  the 
next  thing  is  to  carefully  study  the  personnel  of  the  employes. 
A  careful  study  of  this  phase  of  the  problem  will  show  that  a 
great  many  men  are  misplaced  and  are  doing  either  the  wrong 
kind  of  work,  or  are  not  fitted  for  the  particular  part  of  the  kind  of 
work  they  are  doing.  This  is  particularly  noticeable  where  gang 
work  is  involved.  Very  often  the  men  doing  the  hard  physical 
labor  requiring  little  or  no  skill  are  the  men  physically  less  fitted 
for  the  kind  of  work.  We  likewise  too  often  find  as  a  result  of 
precedent,  a  skilled  molder  employed  as  a  gang  boss  on  a  mold- 
ing floor  setting  cores  on  a  class  or  work  for  which  only  a 
bright,  though  inexperienced  man  is  necessary.  "Misfits"  such  as 
these  are  innumerable,  except  in  the  most  highly  developed  or- 
ganizations. 

The  personal  factor  is  the  one  great  element  to  be  watched, 
studied,  "placed"  and  controlled  before  permanent  improvernent 
in  methods  is  possible.  All  these  conditions  should  be  taken  into 
consideration  as  first  stated,  and  the  gangs  rearranged  to  suit 
the  job  on  which  they  are  to  be  employed.  Such  changes  should 
be  taken  up  through  the  planning  room  and  the  department  fore- 
man. It  is  fully  appreciated  that  we  cannot  always  make  up 
gangs  to  suit  every  individual  job.  We  can,  however,  regulate 
our  work  more  or  less  by  classes  and  divide  our  gangs  into 
similar  classes.  Keep  each  class  of  workmen  as  much  as  pos- 
sible on  the  class  of  work  for  which  they  are  best  fitted. 


i 


).. 


136  TIME   STUDY    INSTRUCTIONS 

g— The  next  step  is  to  study  the  details  of  the  job  and  in  a 
general  way  separate  it  into  several  parts.  For  example— if  it  is 
a  "gang"  molding  job,  the  work  on  the  cope  would  be  consid- 
ered one  general  part  of  the  operation  and  the  work  on  the 
drag  would  be  considered  another  general  part  of  the  operation. 
Other  "part  operations"  would  be  finishing,  core  setting,  green 
sand  coremaking,  closing  and  clamping  molds,  setting  pouring 
cups  and  cups  and  dumping  out.  Study  each  part  of  the  work 
as  though  it  were  a  complete  "operation"  then  sub-divide  it  into 
its  sub-operations.  In  doing  this  be  sure  that  all  unnecessary 
moves  or  sub-operations  are  eliminated.  Where  more  than  one 
man  is  working  on  a  sub-operation  or  part  operation,  see  that 
their  respective  sub-operations  are  so  timed  that  they  are  being 
done  together.  In  other  words,  if  three  men  are  working  on  a 
cope  each  of  them  should  have  something  to  do  all  the  time 
that  the  cope  is  in  their  hands ;  one  or  two  should  not  be  obliged 
to  stand  and  wait  while  the  one  finishes  his  delayed  sub-opera- 
tion. I  have  timed  many  jobs  where  only  two  men  were  in- 
volved, and  found  that  they  have  taken  more  than  twice  as  long 
as  they  should  for  the  reason  that  the  above-mentioned  points 
were  utterly  ignored. 

Before  taking  up  the  next  step,  be  sure  that  the  division  of 
the  job  into  its  several  parts  just  mentioned,  is  complete  and 
logical  and  that  you  are  thoroughly  familiar  with  each  sub- 
operation  or  each  part  of  an  operation.  Take  nothing  for  granted 
and  see  and  understand  for  yourself  exactly  why,  when  and  how 
every  sub-operation  is  performed.  Then,  and  only  then,  can 
you  know  how  to  proceed  or  feel  you  are  on  the  right  track. 

h — Take  each  part  of  the  operation  and  list  on  the  time 
study  form  in  the  logical  and  practicable  sequence  its  various 
sub-operations.  Also  clearly  state  under  each  part  the  number 
of  men  involved  and  where  a  sub-operation  is  done  by  two  or 
rnore  men  be  sure  to  note  beside  it  the  number  of  men.  In 
tirning  sub-operations  be  sure  to  see  that  an  entire  combination 
going  to  make  up  the  particular  operation  are  working  smoothly 
and  that  the  rough  elapsed  time  is  fairly  even.  Having  done 
this,  each  sub-operation  can  be  timed  independent  of  all  other 
considerations.  Do  not  lost  sight  of  the  fact  that  the  decimal 
stop  watch  is  arranged  to  stop  and  start,  accumulating  time  of 
each  successive  operation  and  need  not  be  thrown  back  to  zero 
until  the  sub-operation  is  completed.  If  you  have  started  the 
time  on  a  sub-operation  and  something  interferes  with  the  con- 
tinuation of  it,  or  causes  a  delay,  stop  the  watch  until  the  job  is 
resumed  at  this  point  and  at  a  normal  speed.  To  illustrate— 
you  may  hold  the  watch  on  a  sub-operation  for  twenty  minutes 
total  elapsed  time,  but  if  you  follow  the  above  instructions,  the 
watch  will  sometimes  show  only  perhaps  five  or  six  minutes 
(or  less)  as  the  actual  required  time  for  that  sub-operation. 

The  manipulation  of  the  watch  on  the  above  basis  (and 
judgment  of  what  time  to  eliminate)  is  one  of  the  chief  essen- 
tials when  taking  time  studies.  If  a  time  study  man  cannot 
master  this  part  of  the  work  and  always  be  sure  of  the  correct- 
ness of  his  time  studies,  he  cannot  hold  his  position.  You  will 
find  that  the  average  workman  often  unintentionally  combines  a 
great  many  useless  operations.     This  condition   will  be   found 


FREDERIC    A.    PARKHURST 


37 


most  often  where  you  have  laid  out  a  method  of  operation  dif- 
ferent from  that  to  which  he  has  been  accustomed.  Under  such 
circumstances  you  must  expect  him  to  make  mistakes  and  do 
things  in  their  improper  order  or  do  unnecessary  things.  These 
should  be  eliminated.  In  other  words,  if  the  above  instructions 
have  been  followed  out,  you  have  determined  a  definite  method 
and  sequence  of  operations  and  you  are  only  expected  to  take 
the  time  of  these  necessary  operations.  These  are  the  times 
which  are  to  appear  in  the  columns  marked  "1,"  "2"  and  "3"  on 
the  time  study  form,  figures  6  and  7. 

Do  not  lose  sight  of  the  fact  that  under  the  new  methods 
each  employe  has  fewer  things  to  do  than  formerly.  Do  not  al- 
low time  taken  in  getting  material  to  him  or  his  work  away 
from  him.  Preparation  and  care  of  tools  (dressing,  grinding, 
repairing,  etc.)  are  not  up  to  him;  neither  is  inspection,  looking 
up  and  preparing  his  next  job,  keeping  time  and  similar  work 
formerly  saddled  on  the  workman.  In  the  foundries,  dumping 
out,  pouring  off,  laboring,  etc.,  are  all  specialized  where  formerly 

these  things  were  done  more  or  less  by  everyone. 

• 

i — In  making  time  studies  or  observations  on  other  than  stan- 
dard elemental  operations,  it  is  not  necessary  to  take  the  time 
of  any  standard  elemental  sub-operation  involved  on  that  par- 
ticular job.  As  explained  below,  all  the  standard  elemental 
operations  will  be  charted  and  standard  times  determined  for 
them.  These  standard  elemental  operations  will  be  numbered 
numerically.  Where  they  form  sub-operations  as  explained 
above,  they  may  simply  be  referred  to  on  the  time  study  form  by 
number.  W^hen  you  come  to  figure  up  the  right  hand  column  to 
show  the  time  the  job  should  take,  the  standard  elemental  time 
should  be  taken  from  the  standard  elemental  time  sheets.  You 
will  find  that  eventually  the  actual  time  study  work  involved  will 
be  very  small,  and  then  only  for  exceptional  work.  The  time  for 
the  majority  of  operations  can  be  taken  from  the  standard 
elemental  time  sheets. 

j — Under  no  circumstances  base  a  time  study  on  the  speed  of  an 
unusually  fast  man ;  the  same  thing  applies  to  the  unusually  slow 
man,  as  in  either  case  the  result  of  your  time  study  would  be  of 
no  value.  It  must  be  clearly  borne  in  mind  that  what  we  want  is 
the  correct  time  that  the  job  should  take  when  done  by  the 
average  fast,  industrious  workman  of  the  type  and  qualifica- 
tions necessary  for  that  particular  kind  of  work.  Do  not  be 
afraid  to  take  averages  and  the  more  time  you  take  as  a  check 
the  better.  Furthermore,  bear  in  mind  that  what  time  you  are 
taking  is  to  be  used  as  a  basis  for  issuing  bonus  charts,  the 
prices  on  which  are  under  no  circumstances  to  be  lowered  as 
long  as  the  job  remains  the  same  or  is  done  by  the  same  tools, 
equipment,  methods,  etc.,  as  were  in  use  when  the  bonus  chart 
was  figured.  It  is  one  of  the  fundamental  principles  of  my 
methods  of  Scientific  Management  that  the  facts  he  correctly 
determined  in  the  first  place  and  that  a  schedule  in  prices  or 
bonus  chart  is  to  remain  unaltered.  The  success  of  the  entire 
scheme  ninges  upon  this  one  thing.  You  must  solicit  the  co- 
operation of  the  men,  and  win  and  hold  their  confidence.  Super- 
judgment  is  necessary;  be  sure  you  are  right  and  take  time 
enough  to  do  your  work  well. 


138 


TIME   STUDY    INSTRUCTIONS 


FREDERIC    A.    PARKHURST 


139 


i  )X^ 

; 

■ 

1 

1 

■1 

,'1 

ll 


!    il 


i    il 


k — Having  completed  the  time  study  with  at  least  three  sets 
of  final  observations,  the  average  time  should  be  figured  out  for 
each  sub-operation  and  filled  in  on  the  sheet.  Sub-operation 
times  should  be  totalled  for  each  part  of  the  general  operation 
and  these  "part  operations"  compared.  Then  fill  in  the  time 
that  the  work  should  take,  doing  this  by  part  operations  so  that 
the  various  part  operation  times  may  be  compared.  This  really 
is  the  time  that  you  have  got  to  work  on.  Where  it  is  shown 
that  one  part  of  an  operation  takes  longer  than  another  part  and 
that  these  parts  must  be  completed  in  substantially  the  same 
time,  it  is  obvious  that  something  must  be  done  to  balance  up  the 
time  on  the  slow  part.  You  know  that  theoretically  the  fast 
operation  represents  the  best  normal  production  for  the  job. 
An  extra  man  must  be  put  on  the  slow  operation  or  some  other 
change  made  to  balance  it  up  with  the  fast  one.  When  making 
such  a  change,  it  is  well  to  make  an  additional  time  study  as  a 
check  on  your  figures  before  issuing  instruction  cards  or  bonus 
charts  to  the  workmen. 

1 — On  some  jobs,  operations,  or  particular  classes  of  work 
there  will  be  a  number  of  sub-operations  which  are  incident  only 
to  the  entire  job  as  a  whole.  For  example — when  a  new  job  is 
started  there  may  be  instructions  to  explain,  there  may  be  draw- 
ings to  become  familiar  with,  there  may  be  certain  arrangement 
of  the  work  on  the  floor,  or  in  the  machine  which,  having  once 
been  done,  apply  to  the  entire  quantity  or  until  the  job  is  com- 
pleted. Such  elements  in  some  cases  may  be  standard  elemental 
operations  or  they  may  be  special  to  that  job.  In  any  event  they 
are  what  we  call  lot  operations  and  the  times  for  them  are  known 
as  lot  times.  In  cases  where  these  lot  operations  are  repeated 
daily,  a  proportion  of  their  total  should  be  allotted  to  the  opera- 
tion under  investigation  based  on,  we  will  say,  one  day's  work. 
A  day's  work  constitutes  a  certain  given  production.  The  lot 
time  distributable  to  a  day's  work  should  be  divided  by  this 
number  of  pieces  based  on  the  time  study  and  an  item  included 
on  the  time  study  to  represent  the  lot  time. 

Where  lot  times  are  such  that  they  are  not  repeated,  or  can- 
not be  proportioned  to  any  definite  amount  of  product  as  may  be 
the  case  where  a  new  job  is  started,  and  is  being  rigged  up,  this 
time  may  be  or  may  not  be  included  in  the  individual  piece 
operation  time.  In  such  cases  it  will  be  assumed  that  this  lot 
time  has  been  spent  once  and  for  all,  no  matter  how  long  the 
job  runs.  In  such  a  case,  consider  it  a  "part  operation"  and 
get  your  study  of  it  for  further  reference.  Likewise,  where 
there  may  be  certain  lot  operation  times  at  the  completion  of  a 
job  which  has  run  a  great  many  days  or  weeks,  this  may  be  con- 
sidered as  a  factor  not  particularly  affecting  the  operation  times. 
This  is  so  considered  as  far  as  time  study  work  is  concerned 
(except  as  explained  above)  but  of  course  such  distributable  lot 
time  is  all  charged  up  to  the  cost  of  the  job. 

m — In  studying  operations  as  above  described,  be  sure  that 
the  necessary  work  at  the  beginning  of  the  day  or  at  the  close 
of  the  day's  work  is  included  in  your  time  study.  Such  work  is 
essentially  a  lot  operation,  the  time  for  which  is  "Lot  Time" 
referred  to  above  in  paragraph  (1).  The  care  which  tools 
should  be  given  at  night  and  the  order  in  which  the  floor,  bench, 


machine  or  job  must  be  left  should  be  clearly  settled  and  the 
allowance  of  time  for  putting  it  in  such  condition  provided. 
Such  times  are  primarily  daily  lot  times  and  are  easily  distribu- 
table pro  rata  to  each  operation  performed  for  the  day's  work. 
In  specifying  the  condition  of  equipment  be  sure  that  tools  which 
are  liable  to  rust  are  kept  clean  and  well  oiled  and  also  see  that 
the  mechanical  equipment  provided  is  kept  well  oiled  and  ad- 
justed, either  by  the  operators  themselves  or  by  the  mainte- 
nance department.  Report  all  cases  of  abuse  of  tools.  Do  not 
let  men  use  a  shovel  for  an  axe  or  as  a  crowbar. 

12 — Standard  Elemental   Sub-Operation  Times 

For  Floor  Work 

Reference  has  been  made  above  to  standard  elemental 
operations;  these  are  more  correctly  described  as  standard 
elemental  sub-operation  as  they  are  really  sub-operations, 
combinations  of  which  form  "operations."  The  method  of 
procedure  in  taking  standard  elemental  times  is  the  same 
as  described  above  in  considerable  detail  and  as  there  stated, 
this  description  applies  to  all  types  of  time  study  work.  It 
is  essential  that  before  much  general  time  study  work  is 
undertaken,  we  determine  these  standard  elemental  times. 

The  following  (see  Table  I)  is  given  as  representative 
of  the  more  important  standard  elemental  operations  for 
foundry  work.  It  will  be  noticed  that  the  following  table 
is  divided  into  two  classes.  One  class  includes  those  times 
which  are  influenced  almost  solely  by  the  size  or  weight  of 
the  flask  used.  The  other  class  representing  those  opera- 
tions which  are  more  or  less  dependent  on  the  kind  of 
equipment  or  method  in  use.  In  the  first  class  a  different 
time  will  be  realized  for  each  sub-elemental  operation  for 
each  flask  in  use.  In  the  second  class,  the  same  is  true  for 
each  sub-elemental  operation  for  each  flask  in  use,  except 
that  there  is  the  additional  factor  that  the  same  combination 
may  be  used  in  any  one  of  the  five  or  six  methods,  namely : 

Bench  Molding  (Hand  &  Machine) 

Floor  Molding 

Hand  rollover  machines 

Power  rollover  machines 

Stripping  plate  machines 

Jar  ramming  machines 

Other  methods  may  come  into  future  use. 

The  above  items  are  illustrative  rather  than  specific. 


140 


STANDARD   ELEMENTAL   SUB-OPERATIONS 


FREDERIC    A.    PARKHURST 


141 


TABLE  I 

STANDARD    ELEMENTAL    SUB-OPERATIONS    FOR    FLOOR    MOLDING 


Ref. 


Flask 


^0. 

Sup-operation 

1 

Brush  off  pattern 

2 

Blow  off  pattern 

3 

Dust  on  parting 

4 

Set  10  lb.  flask 

5 

Set  20  lb.  flask 

6 

Set  30  lb.  flask 

7 

Set  40  lb.  flask 

8 

Set  80  lb.  flask 

9 

Set  60  lb.  flask 

10 

Set  70  lb.  flask 

11 

Set  80  lb.  flask 

12 

Set  90  lb.  flask 

13 

Set  100  lb.  flask 

14 

Set  120  lb.  flask 

15 

Set  140  lb.  flask 

16 

Set  160  lb.  flask 

17 

Set  180  lb.  flask 

18 

Set  200  lb.  flask 

19 

Set  220  lb.  flask 

20 

Set  1  sprue 

21 

Set  2  sprue 

?? 

Set  3  sprue 

23 

Set  4  sprue 

24 

Set  1  riser 

25 

Set  2  riser 

26 

Set  3  riser 

27 

Set  4  riser 

28 

Set  5  riser 

29 

Set  6  riser 

30 

Set  7  riser 

31 

Set  8  riser 

32 

Set  9  riser 

33 

Set  10  riser 

34 

Set  11  riser 

35 

Set  12  riser 

36 

Sift  sand  J4-inch  deep 

37 

Sift  sand  J^-inch  deep 

38 

Sift  sand  on  pattern  1 

inch  high 

39 

Sift  sand  on  pattern  2 

nches  high 

40 

Sift  sand  on  pattern  3 

iiches  high 

41 

Sift  sand  on  pattern  4  1 

nches  high 

42 

Sift  sand  on  pattern  5  1 

nches  high 

43 

Sift  sand  on  pattern  6 

inches  high 

44 

Sift  sand  on  pattern  7 

nches  high 

45 

Sift  sand  on  pattern  8 

nches  high 

46 

Sift  sand  on  pattern  9 

inches  high 

47 

Sift  sand  on  pattern  10 

inches  high 

48 

Sift  sand  on  pattern  11 

inches  high 

49 

Sift  sand  on  pattern  12 

inches  high 

50 

Press  sand  around  patt 

ern 

Tl  T2  T3  T4  Etc 


51 

52 

53 

54 

55 

56 

57 

58 

59 

60 

61 

62 

63 

64 

65 

66 

67 

68 

69 

70 

71 

72 

73 

74 

75 

76 

77 

78 

79 

80 

81 

82 

83 

84 

85 

86 

87 

88 

89 

90 

91 

92 

93 

94 

95 

96 

97 

96 

99 

100 

101 

102 

103 

104 

105 

106 


Tuck  straight  bans 
Tuck  slant  out  bans 
Tuck  vertical  bans 
Tuck  irregular  bans 


n 


6 
6 


4  inches  sand 
n  5  inches  sand 
n  6  inches  sand 
7  inches  sand 
n  8  inches  sand 
n  9  inches  sand 
n  10  inches  sand 
n  11  inches  sand 
n  12  inches  sand 
n  13  inches  sand 
in  14  inches  sand 
n  15  inches  sand 
nches  sand  "light" 
nches  sand  "medium** 
nches  sand  "hard" 
nches  sand  "light" 
nches  sand  "medium" 
nches  sand  "hard" 
nches  sand  "light" 
nches  sand  "medium" 
nches  sand  "hard" 
3  inches  above  top 
inches  above  top 
inches  above  top 
inches  above  top 


4 

5 
6 


Shovel 

Shovel 

Shovel 

Shovel 

Shovel 

Shovel 

Shovel 

Shovel 

Shovel 

Shovel 

Shovel 

Shovel 

Ram  4 

Ram  4 

Ram  4 

Ram  6 

Ram 

Ram 

Ram  8 

Ram  8 

Ram  8 

Fill  flask 

Fill  flask 

Fill  flask 

Fill  flask 

Step  off 

Butt  ram 

Level  off  "shovel" 

Level  off    "hard" 

Strike  off 

Pull  1  sprue 

sprue 

sprue 

sprue 
Pull  1  riser 

riser 

riser 

riser 

riser 

riser 

riser 
Pull  8  riser 
Pull  9  riser 
Pull  10  riser 
Pull  11  riser 
Pull  12  riser 

Level  off  before  board  goes  on 
Put  on  board 

Rub  board  to  good  bearing 
Clamp  board  with  2  clamps 
Clamp  board  with  4  clamps 
Clamp  board  with  6  clamps 


Pull 
Pull 
Pull 


Pull 
Pull 
Pull 
Pull 
Pull 
Pull 


2 
3 
4 


2 

3 
4 
5 
6 

7 


142 


STANDARD   ELEMENTAL   SUB-OPERATIONS 


FREDERIC    A.    PARKHURST 


143 


I'M 


1*1 


107 
108 
109 
110 
111 
112 
113 
114 
115 
116 
117 
118 
119 
120 
121 
122 
123 
124 
125 
126 
127 
128 


129 
130 
131 
132 
133 
134 
135 
136 


137 
138 
139 
140 
141 
142 
143 
144 
145 
146 
147 
148 


149 
ISO 
151 
152 
153 


Clamp  board  with  2  clamps  and  wedges 

Clamp  board  with  4  clamps  and  wedges 

Clamp  board  with  6  clamps  and  wedges 

Clamp  board  with  automatic  clamp 

Roll  over  by  hand,  1  man 

Roll  over  by  hand,  2  men 

Roll  over  by  hand,  3  men 

Roll  over  by  hand,  4  men 

Roll  over  by  hand,  5  men 

Roll  over  by  hand,  6  men 

Roll  over  by  hand,  7  men 

Roll  over  by  hand,  8  men 

Roll  over  by  hand,  9  men 

Roll  over  by  hand,  10  men 

Roll  Tabor  hand  rollover  machine,  1  man 

Roll  Tabor  hand  rollover  machine,  2  men 

Roll  Tabor  hand  rollover  machine,  3  men 

Roll  Tabor  hand  rollover  machine,  4  men 

Roll  Pridmore  rollover  machine,  1  man 

Roll  Pridmore  rollover  machine,  2  men 

Roll  Pridmore  rollover  machine,  3  men 

Roll  Pridmore  rollover  machine,  4  men 


Rollover  Tabor  power  rollover  machine 
Rollover  Pridmore  power  rollover  mach. 
Wedge  up  under  board 
Unclamp  (See  above  item  No.  107) 
Unclamp  (See  above  item  No.  108) 
Unclamp  (See  above  item  No.  109) 
Rap  by  hand 
Rap  by  vibrator 


8-inch    12-mch 


Rap  by  hand 
Rap  by  hand 
Rap  by  hand 
Rap  by  hand 
Rap  by  hand 
Rap  by  hand 
Rap  by  hand 
Ray  by  hand 
Rap  by  hand 
Rap  by  hand 
Rap  by  hand 
Rap  by  hand 


and  draw  pat.  on  mach.,  1 
and  draw  pat.  on  mach.,  2 
and  draw  pat.  on  mach.,  3 
and  draw  pat.  on  mach.,  4 
and  draw  pat.  on  mach.,  5 
and  draw  pat.  on  mach.,  6 
and  draw  pat.  on  mach.,  7 
and  draw  pat.  on  mach.,  8 
and  draw  pat.  on  mach.,  9 
and  draw  pat.  on  mach.,  10 
and  draw  pat.  on  mach.,  11 
and  draw  pat.  on  mach.,  12 


Draw  pattern  by  hand,  1  in. 
Draw  pattern  by  hand,  2  in. 
Draw  pattern  by  hand,  3  in. 
Draw  pattern  by  hand,  4  in. 
Draw  pattern  by  hand,  5  in. 


Hand 
Tabor 

Hand 
Pridmore 

in.- 

— 

m.- 

— 

m.- 

— 

m.- 

— 

m.- 

— 

m.- 

— 

m.- 

— 

m.- 

— 

m.- 

— 

m.- 

— 

m.- 

— 

m.- 

By    5  lb.  to    25  lb. 
By  10  lb.  to  200  lb. 

5  lb.    10  lb.    15  lb 

154 

Draw 

155 

Draw 

156 

Draw 

157 

Draw 

158 

Draw 

159 

Draw 

160 

Draw 

pattern  by 
pattern  by 
pattern  by 
pattern  by 
pattern  by 
pattern  by 
pattern  by 


hand,  6  in. 

— 

hand,  7  in. 

— 

hand,  8  in. 

— 

hand,  9  in. 

— 

hand,  10  in. 

— 

hand,  11  in. 

— 

hand,  12  in. 

-i.- 

Time  for  each. 

8 

S 

o 

o 

B 

s|  si    .1 

Ii2 

|h  !£  ts 

in. 

X 

X 

Ou          Cu          GO 

machine,  1 

_ 

machine,  2 

in. 

— 

machine,  3 

in. 

— 

machine,  4 

in. 

— 

machine,  5 

in. 

— 

machine,  6 

in. 

— 

machine,  7 

in. 

— 

machine,  8 

in. 

— 

machine,  9 

in. 

— 

machine,  IC 

)  in. 

•— 

machine,  11 

in. 

— 

machine,  12 

in. 

— 

to  ramming 

position 

— 

161  Draw  pattern  on 

162  Draw  pattern  on 

163  Draw  pattern  on 

164  Draw  pattern  on 

165  Draw  pattern  on 

166  Draw  pattern  on 

167  Draw  pattern  on 

168  Draw  pattern  on 

169  Draw  pattern  on 

170  Draw  pattern  on 

171  Draw  pattern  on 

172  Draw  pattern  on 

173  Return  machine 

Everything  depends  on  the  accuracy  of  the  sub-elemental 
operation  times.  Obviously  unusual  care  must  be  made  in 
the  selection  and  arrangement  of  equipment,  as  well  as  in 
recording  conditions.  Likewise,  the  operative  that  is  being 
timed  must  be  of  the  right  capacity,  and  qualifications,  both 
physical  and  mental.  In  this  connection,  take  the  average 
times  of  at  least  five  different  men  or  groups  of  men  of  the 
qualifications  above  described  in  the  earlier  part  of  these  in- 
structions. 

All  of  the  standard  elemental  sub-operations  listed  below 
should  be  timed  at  least  twenty  different  times  for  each 
different  condition  and  with  each  of  the  five  average  may 
be  made.  In  some  cases  it  will  be  desirable  and  practicable 
to  take  a  great  many  more  than  twenty  observations 
(under  each  varying  condition),  especially  on  short  sub- 
operations.  Where  reference  is  made  to  taking  twenty  ob- 
servations, it  does  not  mean  a  total  of  twenty  where  you 
are  using  five  different  men,  but  twenty  observations  for 
each  of  the  five  or  more  men.     On  this  kind  of  work  ac- 


M 


144 


STANDARD   SUB-EI-EMENTAL   TIMES 


FREDERIC    A.    PARKHURST 


145 


r ; 


I'-  ^ 

]';■  I 


I;:   > 


f 


i 


curacy  is  everything,  for  times  once  determined  for  a  given 
condition,  cannot  be  changed.  As  previously  stated,  they 
constitute  a  large  percentage  of  future  time  determinations. 

13 — Standard  Sub-Elemental  Times  for  Bench  and 

Squeezer  Work 

In  section  12  above  will  be  found  a  long  list  of  variables 
for  floor  work,  on  which  standard  times  apply.  A  similar 
list  of  standard  sub-elemental  operations  has  also  been 
worked  up  applicable  to  bench  and  squeezer  work.  There 
are  about  31  of  these  elemental  sub-operations  for  all  of 
which  standard  times  have  been  determined  for  various 
classes  of  work. 

The  variables  to  be  provided  for  in  establishing  these 
standard  times  have  been  brought  down  to  a  definite 
standard.     They  consist  of  the  following: — 

Job  Qasses 

I — Non-cored  work 
2 — Cored  work 

Pattern  Equipment 
Single 
Gated 
Plated 

Methods 

Bench  (All  hand  methods) 

Machine  (Power  and  hand  Squeezer) 

Flasks 

Snap  and  solid  flasks — 15  different  sizes  by  plane 
dimensions  and  5  depths  for  each: — 75  combina- 
tions in  all. 

The  following  will  help  to  describe  more  fully  the  sub- 
divisions of  the  above  job  classes.  It  may  be  mentioned 
here  that  plated  patterns  come  in  the  same  "job  class"  as 


gated  work.     See  Fig.  8,  which  illustrates  a  few  of  the 
many  varieties  of  work  which  have  been  standardized. 

Job  Class  I  Non-Cored  Work 

I  a.  Plain — ^single  pattern 

lb.  Plains — ^gated  pattern 

ic.  Irregular — single  pattern 

id.  Irregular— gated  pattern 

le.  Complicated — single  pattern 

if.  Complicated — gated  pattern 

• 

Job  Class  2  Cored  Work 

2a.  Plain^ — single  pattern 

2b.  Plain — gated  pattern 

2c.  Irregular — single  pattern 

2d.  Irregular — ^gated  pattern 

2e.  Complicated — single  pattern 

2f.  Complicated— gated  pattern 

In  addition  to  the  standard  times  which  apply  to  both 
cored  and  non-cored  work  must  be  added  core  setting  times 
for  job  class  2  work.  Times  have  been  established  for  core 
setting  covering  from  i  to  8  cores  for  a  single  pattern  and 
from  2  to  42  cores  per  mold  for  gated  or  plated  patterns. 

Based  on  the  factors  referred  to  in  the  last  3  preceding 
paragraphs,  we  have  the  following  combinations  for  any 
of  which  it  is  possible  to  instantly  determine  the  standard 
production  data  directly  from  the  tables,  viz. — 

Standard  production  all  tabulated  and  indexed  (as  per 

table  2)    36325. 

Elemental  operation  times  (bench)   9(X). 

Elemental  operation  times   (bench  plated)    900. 

Elemental  operation  times   (machine) 900. 

Elemental  operation  times  (machine  plated) 900. 

Elemental  operation  times  (core  setting) 69. 

Standard  times  applying  on  the  above  and  admitting  of 

an  almost  unlimited  combination 1440. 

Operations  variable  by  both  job  class  and  mold  sizes 900. 

Total  tabulated  combinations 42334. 


146 


STANDARD    SUB-ELEMENTAL   TIMES 

TABLE  II 

A   TYPICAL    STANDARD   PRODUCTION   DATA   TABLE 


hi 


r 

— JOI 

«  r^T    A  00  ^¥7  T»/~iXTTTC  /^T  A  CC  Q 

i   CLASS  2cj   BOWUa  CL.Aao  0 \ 

r 

«   £• 

a 

Number 

of  Cores  to  Set  Single  Pattern 

1  & 

s 
d 

1 

2 

3    4    5    6    7    8 

2 

4 

10x24  6 

1440  M 
P 
C 

Itt 

168 
2585S 

1S4 

154 
1723S 

142   132   122   114   187   Itl 

142   132   122   114   107   101 
2032S  3020S  32S2S  3229S  3243S  3245S 

147 

294 
2330S 

14S 

580 
2163S 

7 

1680  M 
P 
C 

ISt 

159 
2586S 

14C 

146 

2731S 

135    128    117    118    184    88 

135   126   117   110   104    98 
2288S  3234S  2691S  3241S  3246S  3246S 

148 

280 
2331S 

138 

552 
2526S 

8 

1920  M 
P 
C 

ISt 

150 
2031S 

13f 

139 

2730S 

128  128    113   188   188    85 

129  130   113    106   100    95 
2530S  3224S  3228S  3239S  3253S  3259S 

133 

266 
2332S 

132 

528 
2541 S 

9 

2160  M 
P 
C 

143 

143 
2534S 

133 

133 
2033S 

123    118    188    182    87    82 

123   116   109   102    97         92 
2531S  3236S  3238S  3255S  3261S  3257S 

127 

254 
3004S 

128 

504 
2540S 

10 

2400  M 
P 
C 

IM 

136 
2529S 

127 

127 
2034S 

118    111    185    88    84    88 

118   111   105    99    94    89 
3230S  3232S  3242S  3256S  3258S  3287S 

122 

244 
1701S 

121 

484 
3159S 

11x26   6 

1716  M 
P 
C 

ISS 

158 

2287S 

I4i 

146 
2731S 

135    12s   117    118   183    88 

135   125   117   110   103    98 
2288S  3226S  2691 S  3241S  3240S  3246S 

138 

276 
2528S 

138 

544 
2350S 

7 

2002  M 
P 
C 

148 

148 
2042S 

138 

138 
3225S 

128   118    112   185    M    84 

128   119   112   105    99    94 
3223S  3235S  3237S  3242S  3256S  3258S 

131 

262 
2i77S 

128 

516 
2165S 

8 

2288  M 
P 
C 

14t 

140 
2029S 

130 

2590S 

121    114    187    181    85    81 

121   114   107   101    95    91 
3227S  3229S  3243S  3245S  3259S  3264S 

124 

248 
2595S 

123 

492 
2166S 

9 

2574  M 
P 
C 

ISZ 

132 
3030S 

124 

124 
2733S 

lis    188    182    87    82    87 

115   108   102    97    92    87 
3231S  3233S  3255S  3361S  3257S  3304S 

118 

238 
2693S 

117 

468 
1724S 

10 

2860  M 
P 
C 

12f 

125 
3226S 

118 

118 
3230S 

118   184    88    S3    88    84 

110   104    98    93    88    84 
3241S  3244S  3246S  3262S  3260S  3318S 

112 

224 
1704S 

111 

444 
1726S 

12x16  6 

1152  M 
P 
C 

IM 

180 
2036S 

184 

164 
20388 

158   138    128    128    112   185 

150   139   128   120   112   105 
2031S  2730S  3223S  3224S  3237S  3242S 

157 

314 
2096S 

155 

620 

2928S 

7 

1344  M 
P 

c 

m 

171 

2037S 

157 

157 
2039S 

144    133    124    118    188    182 

144   133   124   116   109   102 
2283S  2033S  2733S  3236S  3238S  3255S 

151 

302 
2593S 

148 

5% 
1767S 

8 

1536  M 
P 
C 

1C3 

163 
2027S 

ISO 

150 
2031S 

138   128   128   112   185   188 

138   129   120   112   105   10) 
3225S  2530S  3224S  3237S  3242S  3253S 

145 

290 
2167S 

143 

572 
2226S 

9 

1728  M 
P 
C 

ISC 

156 

2692S 

144 

144 

2283S 

133    124    118    188    183    87 

133   124   116   109   103    97 
2033S  2733S  3236S  3238S  3240S  3261 S 

138 

278 
2537S 

137 

548 
2164S 

10 

1920  M 
P 
C 

ISt 

150 
2031S 

138 

139 
2730S 

128    128   112    188    188    85 

128   130   112   106   100    95 
3223S  3224S  3237S  3239S  3253S  3259S 

134 

268 
25%S 

132 

528 
2541S 

-i 


Though  the  above  represents  over  42,000  tabulated  com- 
binations, it  is  possible  to  make  up  other  combinations  to 
meet  almost  any  desired  case.  It  often  happens  that  some 
variable  on  a  new  job  throws  it  out  of  the  standardized  tab- 
ular group.  In  such  cases,  all  that  it  is  necessary  to  do  is 
to  add  or  subtract   certain  sub-operation  times   from  the 


i  I 


FREDERIC    A.    PARKHURST  1 47 

TABLE    II— Continued 
A  TYPICAL   STANDARD   PRODUCTION   DATA  TABLE 


8 


10 


-JOB   CLASS  2F   BONUS   CLASS  8 

Number  of  Patterns  on  Plate 
12         14        16  18        20         22        24 


30 


36        42 


14S 

2224S 

141 

1128 
1779S 

138 

1390 
2552S 

135 

1620 
2064S 

133 

1862 
2316S 

138 

2060 
1814S 

127 

2286 
3012S 

125 

2500 
2716S 

123 

2706 
2130S 

128 

2880 
1884S 

116 

3480 
21238 

113 

4068 
27368 

118 

4620 
1933S 

Uf 

816 
1752S 

135 

1060 
1783S 

132 

1320 
2504S 

121 

1548 
2149S 

127 

1778 
3010S 

124 

1984 
2632S 

122 

2196 
2445S 

128 

2400 
2214S 

118 

2596 
3274S 

116 

2784 
21868 

111 

3330 
31368 

186 

3888 
18938 

186 

4452 
3284S 

138 

780 
1760S 

12s 

1024 
26143 

128 

1260 
1772S 

124 

1488 
2416S 

121 

1694 
3271S 

118 

1904 
2348S 

117 

2106 

2737S 

115 

2300 
2569S 

113 

2486 
2720S 

111 

2664 
18328 

187 

3210 
3297S 

184 

3744 
18698 

183 

4326 
3300S 

124 

744 
2470S 

123 

984 
2158S 

121 

1210 
3267S 

118 

1416 
2241S 

118 

1624 
2946S 

114 

1824 
1791S 

112 

2016 
2263S 

111 

2220 
1811S 

188 

2398 
327SS 

187 

2568 
23988 

183 

3090 
3298S 

181 

3636 
18988 

88 

4158 
3164S 

118 

714 
3699S 

118 

944 

2757S 

118 

1160 

2155S 

114 

1369 
1769S 

112 

1568 

2773S 

118 

1760 
1822S 

188 

1944 
2621S 

186 

2120 
2780S 

185 

2310 
2499S 

183 

2472 
27858 

188 

3000 
22128 

87 

3492 
18998 

96 

4032 
22S2S 

135 

810 

2092S 

133 

1064 
2324S 

131 

1310 
2370S 

128 

1536 
1798S 

125 

1750 
2711S 

123 

1968 
2142S 

128 

2160 
1812S 

118 

2360 
2779S 

118 

2552 
3276S 

114 

2736 
1831S 

118 

3300 
22108 

187 

3852 
2395S 

185 

4410 
23068 

128 

768 
1754S 

128 

1008 
2270S 

124 

1240 
2618S 

122 

1464 
2449S 

118 

1666 
2701S 

117 

1872 
1790S 

115 

2070 
2566S 

113 

2260 
2717S 

111 

2442 
3295S 

188 

2616 
18358 

186 

3180 
24958 

183 

3708 
28108 

181 

4242 
32828 

121 

726 

3288S 

128 

960 
2271S 

118 

1180 
3290S 

118 

1392 
2196S 

114 

1596 
2318S 

112 

1792 
2628S 

lie 

1980 
1816S 

188 

2160 
1812S 

188 

2332 
3303S 

184 

2496 
18888 

161 

3030 
32808 

89 

3564 
18978 

97 

4074 
32838 

lis 

690 
2549S 

114 

912 

1747S 

113 

1130 
2707S 

118 

1330 
2504S 

188 

1512 
2556S 

187 

1712 
2400S 

186 

1890 
2081S 

183 

2060 
2781S 

182 

2244 
2900S 

188 

2400 
22148 

87 

2910 
32318 

95 

3420 
19268 

93 

3906 
30808 

118 

660 

25oes 

188 

872 
1751S 

188 

1060 
1783S 

188 

1272 
2505S 

184 

1456 
1802S 

182 

1632 
1796S 

181 

1818 
3311S 

88 

1980 
1816S 

88 

2156 
2104S 

86 

2304 
18388 

83 

2790 
29328 

91 

3276 
18498 

98 

3780 
18948 

153 

918 
2372S 

158 

1200 
2221s 

148 

1480 
1803S 

144 

1728 
1793S 

141 

1974 

2559S 

138 

2208 
2519S 

135 

2430 

22298 

133 

2660 
2312S 

138 

2860 
2213S 

127 

3048 
3015S 

122 

3660 
24378 

119 

4284 
27258 

118 

4872 
2958S 

148 

876 

2272S 

145 

1160 
2155S 

142 

1420 
2066S 

138 

1668 
2558S 

138 

1904 
2348S 

133 

2128 
2191S 

138 

2340 
1809S 

128 

2560 
2258S 

125 

2750 
2719S 

123 

2952 
2126S 

118 

3540 
22358 

115 

4140 
25148 

113 

474^ 
2729S 

141 

846 
2548S 

138 

1112 

2550S 

137 

1370 
2152S 

133 

1596 
2318S 

131 

1834 
2366S 

128 

2048 
2634S 

12s 

2250 
2714S 

123 

2460 
2134S 

121 

2662 
3249S 

118 

2856 
18S5S 

114 

3420 
19268 

111 

39% 
18928 

188 

4578 
32818 

135 

810 
2092S 

134 

1072 
2613S 

132 

1320 
2504S 

128 

1548 
2149S 

128 

1764 
2317S 

124 

1984 
3632S 

121 

2178 
3248S 

118 

2380 

2295S 

117 

2574 
2215S 

115 

2760 
25178 

111 

3330 
31268 

188 

3888 
18938 

186 

4452 
32848 

131 

786 
2373S 

128 

1032 
2157S 

127 

1270 
3006S 

124 

1488 
2468S 

122 

1708 
2629S 

128 

1920 
1817S 

117 

2106 
2737S 

115 

2300 
2569S 

113 

2486 
2720S 

111 

2664 
18328 

188 

3240 
19028 

185 

3780 
18948 

183 

4326 
3300S 

Standard  time  sheets.    Table  II  is  a  typical  table  and  is  an 
exact  copy  of  one  of  the  set  of  90. 

An  immense  amount  of  detail  work  was  necessary  before 
the  standardization  of  all  the  above  variables  and  their  pos- 
sible combinations  was  complete.  It  was  necessary  to  take 
thousands  of  time  studies.    These  studies  had  to  apply  to  a 


I 


m 


■  < 


t 


I 


148 


STANDARD    SUB-ELEMENTAL    TIMES 


FREDERIC    A.    PARKHURST 


149 


great  variety  of  patterns  of  all  classes  and  for  each  of  the 
above  mentioned  forms  of  equipment,  method  and  flask 
sizes.  The  result  of  all  this  work  has  been  gratifying,  how- 
ever. 

All  of  the  standard  data  has  now  been  tabulated  with  the 
result  that  95  per  cent  of  all  bench  and  squeezer  work  done 
by  any  of  the  six  foundries  of  the  Aluminum  Castings  Co. 
can  be  put  on  bonus  direct  from  these  tables.  This  means 
definite  and  absolute  standardization.  Short  run  work  can 
be  put  on  bonus  at  once  without  the  necessity  for  taking 
time  studies  on  each  pattern. 

By  this  method  it  is  possible  to  apply  scientific  manage- 
ment methods  to  a  short  job  which  would  ordinarily  run 
out  long  before  a  satisfactory  time  study  could  be  made. 
The  importance  of  this  one  feature  alone  must  not  be  under- 
estimated. As  several  of  the  Aluminum  Castings  Co.  foun- 
dries do  practically  a  jobbing  business,  the  value  of  these 
tables  can  be  readily  appreciated. 

This  standard  data  has  even  more  value  in  several  other 
ways  than  the  feature  above  mentioned.  In  the  first  place 
there  is  no  guess  work  as  to  the  most  economical  combina- 
tion of  pattern  equipment,  number  per  mold,  size  of  flask, 
method  to  be  employed,  etc.  A  glance  at  the  tables  tells 
instantly  what  is  the  best  combinations  to  employ  for  each 
job  to  assure  a  maximum  production  and  minimum  cost. 

Yet  another  great  value  is  that  of  having  definite  data  on 
which  to  base  estimates.  This  appHes  both  to  the  routine 
work  of  estimating,  as  well  as  the  solving  of  problems  of 
this  nature  by  the  sales  representatives.  This  is  true  of 
both  the  floor,  bench  and  squeezer  data.  Combining  these 
advantages  and  the  ability  (through  accurate  analytical 
costs)  to  check  up  past  performances  puts  a  firm  employing 
these  methods  in  position  to  practically  predetermine  costs. 

New  equipment  can  be  made  to  absolutely  agree  with  the 
best  standards  and  practice.  There  is  no  longer  need  to 
guess  and  try  "rule  of  thumb"  methods  or  "cut  and  dry'* 
until  we  hit  the  right  way,  or  the  best  combinations.  It  is 
impossible  here  to  list  all  of  the  many  advantages  to  be  de- 


rived  from  this  data.  The  results  speak  for  themselves. 
We  are  finding  new  uses  and  new  value  in  this  standardized 
data  every  day  it  is  in  use. 

All  bench  and  squeezer  jobs  at  both  the  Detroit  and 
Cleveland  plants  have  been  put  on  bonus  direct  from  these 
standard  production  data  sheets  for  the  last  six  months.  We 
have  yet  to  find  a  case  where  the  men  have  been  unable  to 
reach  the  production  asked  for.  Neither  have  the  maxi- 
mum production  figures  been  exceeded.  The  author  claims 
that  the  standardization  of  foundry  operations  and  practice 
here  described  marks  an  epoch  in  the  history  of  foundry 
work  and  is  in  itself  the  vindication  of  scientific  manage- 
ment in  this  virgin  field. 

14 — Standard  Miscellaneous  Data 

The  Time  Study  Foreman  is  responsible  for  the  follow- 
ing standard  data.  This  data  must  be  kept  up  to  date.  The 
list  given  below  is  subject  to  revision  and  amplification  to 
suit  varying  conditions  and  plants. 

Flask  Data — Flasks  are  tools,  hence  come  into  the  "T" 
class  of  symbols.  Our  flasks  must  be  listed  in  a  systematic 
manner  in  order  of  dimension :  commencing  with  the  small- 
est "Ti,  T2,  T3,  etc.,  new  flasks  take  the  next  number. 
The  following  shows  how  this  list  should  appear : 

Flask  Record 
Inside  Contents    Weight 

Flask    Pattern  Quan-    Dimensions    Bars    Weight    cubic    with  san.d 


symbol    symbol    tity  L  W  D  lbs. 

Flask  Record — Continued 


inches 


Net  wt. 
sand 


Weight  rammed  Net  wt. 

full  of  sand  of  sand 


C-Cope 
D-Drag 


this 
pattern 

Weight 
of  board 


Handling  Times  of  Sand  and  Equipment — The  data  we 
are  accumulating  on  the  weight  of  sand  rammed  "soft," 
"medium"  and  "hard"  will  allow  us  to  determine  an  average 
weight  per  cubic  inch  or  foot.  The  chief  controlling  factor 
in  most  of  our  work  (exclusive  of  the  standard  elemental 
sub-operations)  is  the  weight  of  sand  to  be  shoveled  and 
rammed,  area  and  contour  of  flasks  and  the  weight  of  the 


I50 


STANDARD    MISCELLANEOUS    DATA 


FREDERIC    A.    PARKHURST 


!: 


cope  and  drag  complete.  To  these  shall  be  added  the  un- 
usual but  necessary  operations  peculiar  to  certain  jobs  not 
covered  by  our  standard  production  data. 

After  we  have  standard  times  on  the  sub-operations  we 
will  then  base  all  our  calculations  on  our  standard  of  "allow- 
able work  in  foot  pounds  per  man." 

Core  Work — Standard  data  for  this  work  will  be  similar 
(but  much  simpler)  to  that  above  mentioned  in  the  list  of 
standard  sub-elemental  operations.  The  chief  factors  to  de- 
termine (for  each  core  box  of  each  pattern)  are  listed  in  a 
manner  similar  to  that  shown  above  for  molding  operations. 
This  detail  need  not  be  repeated  here. 

Tool  and  Equipment  Data — Keep  a  complete  record  on 
each  time  study  of  each  job  of  the  tools  and  equipment  in 
use.  Do  not  lose  sight  of  the  fact  that  the  time  study  must 
include  all  information  (or  references)  pertaining  to  each 
job  or  operation.  All  material  and  the  quantities  used  per 
unit  of  work  must  be  fully  specified  as  well  as  the  tools  and 
equipment.  This  information  is  absolutely  essential  before 
the  instruction  card  or  bonus  chart  can  be  issued. 

Files — File  all  time  studies,  in  a  vertical  loose-leaf  file, 
arranged  numerically  by  the  "time  study  number."  Keep 
a  3x5-inch  card  index  to  the  time  study  file,  arranged  by 
classes  of  work  and  in  alphabetical  and  numerical  order  of 
piece  symbol  or  other  identifying  mark.  This  card  shows 
the  complete  routing  for  each  piece  as  well  as  the  bonus 
maximum  and  bonus  chart  number  for  each  operation. 

References — A  general  treatment  of  the  subject  of  time 
study  work  will  be  found  in  "Applied  Methods  of  Scientific 
Management,"  copy  of  which  is  on  file  in  the  planning 
room,  and  same  is  understood  to  be  a  part  of  these  instruc- 
tions, particularly  matter  on  pages  147  to  166  inclusive. 

Responsibility  for  Jobs  on  Bonus — After  a  satisfactory 
time  study  has  been  made  and  the  time  for  a  job  determined 
(and  the  bonus  list  issued)  the  real  work  begins.  It  is  up 
to  the  Time  Study  Foreman  and  his  assistants  to  follow 
each  new  bonus  job  until  it  is  going  satisfactorily,  both  as 
to  method,  quantity  and  quality.     They  must  not  relax  their 


151 


vigilance  until  such  time  as  the  job  reaches  the  maximum 
production  called  for  by  the  Differential  Bonus  Chart. 
When  this  production  has  been  reached  and  held  for  a  time 
(and  then  only)  the  men  themselves  will  see  that  it  does  not 
fall  off  through  any  fault  of  theirs. 

15— General  Instructions  to  Time  Study  Men 

The  time  study  men.  must  not  forget  that  they  are  in  the 
position  of  functional  bosses  and  must  deport  themselves 
accordingly.  In  developing  a  position  of  this  kind,  care 
must  be  taken  in  setting  an  example  to  the  men  and  by  in- 
dustry and  ability  try  to  raise  the  general  standard  of  the 
shop. 

In  keeping  your  records,  be  systematic  and  study  the 
symbol  system  as  it  is  developed  so  that  you  will  fully  ap- 
preciate what  is  involved  in  the  different  series  of  symbols 
which  will  be  put  in  use  from  time  to  time.  The  use  of 
symbols  means  a  large  saving  of  time  by  greatly  reducing 
the  work,  besides  simplifying  records. 

In  connection  with  your  regular  time  study  work  you 
will  be  expected  to  report  to  the  proper  parties  all  matters 
pertaining  to  the  violation  of  the  shop  rules.  These  should 
be  carefully  studied  so  that  the  time  study  men  will  be  thor- 
oughly familiar  with  them.  Time  study  men  can  also  be 
of  material  assistance  to  the  shop  employes  by  instructing 
them  regarding  the  details  specified  in  the  rules  with  which 
they  may  be  unfamiliar,  or  do  not  understand. 


w 


i 


I 


LECTURE  XXVI 

TIME  STUDY  AND  BONUS   (contiliued) 
16.    Parkhurst's  Differential  Bonus. 

The  above  subject  will  discuss  the  author's  diflferential  bonus  in 
somewhat  more  detail  than  is  covered  in  the  text,  and  previously  dis- 
cussed in  Lecture  23. 

The  following  is  reprinted  complete  from  the  author's  "Scientific 
Management  in  the  Foundry,"  section  16. 

It  is  not  the  intention  here  to  enter  into  a  discussion, 
academic  or  otherwise,  of  the  advantages  of  the  various 
forms  of  remunerating  labor.  Based  on  the  writer's  experi- 
ence with  day  work,  piece  work,  premium  and  bonus,  he 
has  during  the  last  ten  years  developed  a  differential  bonus 
system.  The  differential  system,  as  described  below,  has 
been  flexible  enough  to  be  readily  adaptable  to  any  require- 
ments put  upon  it.  Using  the  same  fundamental  principle 
throughout,  the  application  of  the  standard  differential 
bonus  charts  is  universal. 

The  author's  experience  has  been  that  with  properly 
standardized  hourly  rates  for  various  grades  of  labor  in 
each  trade  involved,  the  addition  of  a  generous  bonus  for 
high  production  will  give  greater  results  than  any  other 
method.  As  he  has  had  occasion  to  remark  before,  we  pay 
for  the  employe's  time,  we  arrange  his  equipment  and  sup- 
ply a  more  or  less  complex  organization  to  control  that 
equipment  and  the  materials  in  process.  By  positive  means 
we  determine  the  maximum  production  that  the  average 
good  man  can  turn  out  per  day  and  we  certainly  have  the 
privilege  of  utilizing  the  time  we  pay  for  to  the  best  advan- 
tage and  toward  this  end.  Obviously,  however,  it  is  not  fair 
to  the  worker  to  prevent  his  participating  in  the  saving  that 
is  realized.  We  do  this  by  means  of  increased  wages  (in  the 
form  of  bonus)  in  proportion  to  the  additional  work  he 
turns  out. 

152 


FREDERIC    A.    PARKHURST 


153 


If  the  employe  is  assured  of  a  day's  pay  his  mental  atti- 
tude from  the  very  start  is  going  to  be  more  favorable  than 
i  f  his  pay  depends  entirely  on  what  he  turns  out  for  a  day's 
work,  as  under  the  piece  work  system.  In  a  piece  work 
shop  the  men  are  often  put  on  strange  jobs  and  though  they 
work  hard  all  day  they  are  not  able  to  earn  more  than  one- 
third  or  one-half  of  a  regular  day's  pay.  This  may  go  on 
for  several  days  before  they  can  make  their  average  piece 
work  day's  pay.    This  obviously  is  unfair. 

The  premium  system,  though  it  carries  a  specific  day  rat- 
ing, is  not  efficient  in  that  the  average  methods  used  leave 
too  much  to  the  judgment  and  will  of  the  individual  em- 
ploye. In  other  words,  you  can't  get  maximum  production 
if  you  say  to  a  man  that  his  rate  will  be  $2.50  a  day  and 
that  he  gets  the  equivalent  to  half  (or  some  other  propor- 
tion) of  what  he  saves,  over  and  above,  say  ten  pieces  per 
day.  The  tendency  of  this  method  is  for  everyone  from 
the  management  down  to  tend  to  approximately  what  the 
man  ought  to  do,  and  if  this  approximation  is  wrong  it 
limits  production,  because  he  will  not  make  all  that  he  pos- 
sibly can.  The  same  thing  applies  to  piece  work  where 
rates  are  incorrectly  set. 

By  the  adoption  of  standard  hourly  rates  and  differential 
bonus  for  different  classes  of  work,  combined  with  a  proper 
organization,  including  an  especially  strict  inspection  serv- 
ice, you  can  much  better  control  your  labor  and  product 
than  you  can  under  the  average  piece  work  system. 

Combine  with  the  above  methods  accurate  information 
as  to  exactly  what  is  involved  in  each  job,  how  long  each 
job  should  take  based  on  stop  watch  observations;  add  to 
these  an  openly  advertised  policy  that  under  no  circum- 
stances will  you  reduce  a  rate  once  set.  Table  4  in  section 
18  indicates  what  the  result  will  be. 

To  develop  and  standardize  the  differential  bonus,  as  used 
by  the  author,  he  decided  to  provide  in  standard  charts  for 
fifteen  different  bonus  classes.  This  classification  applies  to 
the  job  and  not  to  the  man.  In  other  words,  jobs  are  classi- 
fied as  belonging  in  bonus  class  i,  3  or  8,  as  the  case  may 


i 


n 


|m 


I 

■ 


1 


^     }: 


154 


PARKHURST    DIFFERENTIAL    BONUS 


be.  Each  bonus  class  number  is  equivalent  to  25c  per  day 
maximum  bonus  for  100  per  cent  efficiency.  Therefore,  a 
job  rated  as  belonging  under  bonus  class  5  would  pay  $1.25 
maximum  bonus  for  100  per  cent  efficiency. 

The  differential  is  figured  on  a  basis  of  10  per  cent  of  the 
maximum  bonus  for  50  per  cent  production  and  100  per 
cent  bonus  for  100  per  cent  production.  It  might  be 
further  explained  here  that  the  bonus  jobs  are  seldom 
started  as  low  as  50  per  cent  of  the  calculated  maximum 
of  production.  More  generally  in  a  new  shop  the  bonus  is 
started  at  60  or  70  per  cent,  depending  on  the  local  shop 
conditions'. 

Fig.  9  shows  a  standard  differential  bonus  chart  covering 
two  charts,  namely  100  and  loi  units  per  day.  The  letters 
A,  B,  C  and  D,  representing  50,  60,  70  and  80  per  cent  pro- 
duction respectively.  The  letter  5*  represents  standard  pro- 
duction or  100  per  cent  efficiency.  In  Fig.  9  referred  to, 
chart  100  was  illustrated,  so  as  to  more  readily  explain  the 
percentage  basis  used  at  the  different  stages  of  a  plant's 
efficiency. 

To  further  explain,  it  should  be  noted  that  local  plant 
conditions,  the  class  of  help  and  other  variables  govern  to  a 
great  extent  the  progress  that  can  be  made  particularly. 
This  is  particularly  true  of  the  early  stages  of  reorganiza- 
tion work.  During  these  early  stages,  it  is  necessary  to  com- 
mence the  bonus  sometimes  as  low  as  60  and  sometimes  as 
low  as  50  per  cent  of  the  maximum  bonus  production.  This 
statement  can  be  more  readily  appreciated  when  one  stops  to 
consider  that  it  is  not  unusual  to  ask  for  five  or  six  times 
the  production  per  day  under  bonus  that  has  been  the  ordi- 
nary practice  of  the  shop  under  day  work.  If  we  start 
bonus  (even  though  it  is  a  small  amount)  at  50  per  cent  or 
60  per  cent  of  this  maximum,  we  put  the  bonus  nearer  the 
reach  of  the  employe.  This  tends  to  encourage  him  to  make 
a  little  effort  to  demonstrate  for  himself  whether  bonus  can 
be  made  or  not.  Of  course,  at  this  stage  of  his  work  he  has 
the  help  of  the  Time  Study  Foreman  to  see  that  he  does  not 
waste  time  in  false  moves.     As  time  goes  on  the  average 


FREDERIC    A.    PARKHURST 


155 


efficiency  of  the  shop  becomes  higher  and  the  starting  point 
for  new  jobs  can  be  raised  to  70  per  cent  and  later  to  80 
per  cent  of  the  calculated  maximum.  In  all  cases  the  bonus 
at  given  percentages  is  the  same  on  any  chart,  whether  it 
starts  at  60  per  cent  or  higher. 

At  the  Detroit  plant  of  the  Aluminum  Castings  Co.  all 
bonus  jobs  have  been  figured  to  commence  at  80  per  cent 
of  the  maximum  bonus  production.  This  80  per  cent  factor 
was  established  Sept.  i,  191 3.  We  have  yet  to  find  a  case 
where  the  man  did  not  earn  bonus,  nor  have  we  found  any 
case  where  the  maximum  bonus  was  appreciably  exceeded. 

It  should  be  understood  that  the  figure  of  80  per  cent  above 
mentioned,  means  the  point  at  which  the  bonus  commences. 
On  all  jobs  it  is  expected  that  the  average  workman  will 
reach  90  per  cent  to  100  per  cent  of  the  maximum  produc- 
tion. The  exceptional  man  will  go  to  100  per  cent  and  be- 
yond. 

This  exceptional  man  with  the  ability  to  exceed  what  the 
average  good  worker  can  do  is  perfectly  welcome  to  the 
extra  remunerations  that  he  gets  by  exceeding  the  100  per 
cent  mark.  It  should  be  noted  that  though  the  bonus  charts 
are  figured  to  100  per  cent  production,  if  a  man  should  ex- 
ceed this  amount  by  5  or  10  per  cent  the  differential  is  ex- 
tended down  to  the  figure  which  he  actually  realizes.  In 
other  words,  there  is  no  limit.  Fig.  10  illustrates  a  typical 
bonus  chart  form  FAP  117.  At  the  time  this  chart  was 
issued,  all  bonus  commenced  at  70  per  cent  of  the  maximum. 

The  success  of  any  form  of  management  lies  in  the  con- 
fidence which  the  management  is  enabled  to  instill  into  the 
personnel.  Subterfuge  and  excuses  for  changing  rates  must 
be  absolutely  avoided.  The  writer  has  always  made  it  a  point 
never  to  lower  a  bonus  rate  once  established.  This  policy  is 
openly  published  in  the  shop  rules  with  concerns  he  has  been 
identified  with.  He  owes  the  success  of  his  methods  in  a 
great  measure  to  the  fact  that  the  personal  factor  has  been 
of  paramount  consideration  with  him  and  all  of  those  who 
come  in  contact  with  him  and  his  methods  know  that  prices 
will  not  be  lowered,  providing  of  course  the  equipment  and 


156 


PARKHURST    DIFFERENTIAL   BONUS 


FREDERIC    A.    PARKHURST 


157 


Standard  Differential 
Bonus   Chart. 


Form  FAP201 


Frederick  A.  Parkhurst,  M.  E. 
Organizing   Engineer. 


STANDARD   DIFFERENTIAL  BONUS   CHARTS   IM  AND   Itl 

1  Sheets,  Sheet  1 


SS 


B 


1  ■ 


Bonus  Production  in— 

-^       (The 

decimal 

over  the 

bonus  cl 

ass   figures  . 

are 

Units  per 

day  for 

the  differential  or  increment 

of  change.) 

Chart. 

Chart. 

.0045 

.009 

.0135 

.018 

.0225 

.027 

100 

101 

1 

2 

3 

4 

5 

6 

SO 

51 

.025 

.050 

.075 

.100 

.125 

.150 

51 

52 

.030 

.059 

.089 

.118 

.148 

.177 

52 

53 

.034 

.068 

.102 

.136 

.170 

.204 

53 

54 

.039 

.077 

.116 

.154 

.193 

.231 

54 

55 

.043 

.066 

.129 

.172 

.215 

.258 

55 

56 

.048 

.095 

.143 

.190 

.238 

.285 

56 

57 

.052 

.104 

.156 

.208 

.260 

J12 

57 

58 

.057 

.113 

.170 

.225 

.283 

.339 

58 

59 

.061 

.122 

.183 

.244 

.305 

.366 

59 

60 

.066 

.131 

.197 

.262 

.328 

.393 

60 

61 

.070 

.140 

.210 

.280 

.350 

.420 

61 

62 

.075 

.149 

.224 

.298 

.373 

.447 

62 

63 

.079 

.158 

.237 

.316 

.395 

.474 

63 

64 

.084 

.167 

.251 

.334 

.418 

JOl 

64 

65 

.088 

.176 

.264 

.352 

.440 

.528 

65 

66 

.093 

.185 

.278 

.370 

.463 

.555 

66 

67 

.097 

.194 

.291 

.388 

.485 

.582 

67 

68 

.102 

.203 

.305 

.406 

.508 

.609 

68 

69 

.106 

.212 

.318 

.424 

.530 

j636 

69 

70 

.111 

.221 

.332 

.442 

.553 

463 

70 

71 

.115 

.230 

.345 

.460 

.575 

.690 

71 

72 

.120 

.239 

.359 

.478 

.596 

J17 

72 

73 

.124 

.248 

.372 

.496 

.620 

744 

73 

74 

.129 

.257 

.386 

.514 

.643 

.771 

74 

75 

.133 

.399 

.532 

.665 

798 

75 

76 

.138 

.275 

.413 

.550 

.688 

.825 

76 

77 

.142 

.284 

.426 

.568 

.710 

.852 

77 

78 

.147 

.293 

.440 

.586 

.733 

.879 

78 

79 

.151 

.302 

.453 

.604 

.755 

.906 

79 

80 

.156 

.311 

.467 

.622 

.778 

.933 

80 

81 

.160 

.320 

.480 

.640 

.800 

.960 

81 

82 

.165 

.329 

.494 

.658 

.823 

.987 

82 

83 

.169 

.338 

.507. 

.676 

.845 

1.014 

83 

84 

.174 

.347 

.521 

.694 

.868 

1.041 

84 

85 

.178 

.356 

.534 

.712 

.890 

1.068 

85 

86 

.183 

.365 

•  *rffO 

.730 

.913 

1.095 

86 

87 

.187 

.374 

.561 

.748 

.935 

1.122 

87 

88 

.192 

.383 

.575 

.766 

.958 

1.149 

88 

89 

.196 

.392 

.588 

.784 

.980 

1.176 

89 

90 

.201 

.401 

.602 

.802 

i.oai 

1.203 

90 

91 

.205 

.410 

.615 

.820 

1.025 

1.230 

91 

92 

.210 

.419 

.629 

.838 

1.048 

1.257 

92 

93 

.214 

.428 

.642 

.856 

1.070 

1.284 

93 

94 

.219 

.437 

.656 

.874 

1.093 

1.311 

94 

95 

.223 

.446 

.669 

.892 

1.115 

1.338 

95 

96 

.228 

.455 

.683 

.910 

1.138 

1J65 

96 

97 

.232 

.464 

.696 

.928 

1.160 

1.392 

97 

98 

.237 

.473 

.710 

.946 

1.183 

1.419 

98 

99 

.241 

.482 

.723 

.964 

1.205 

1.446 

99 

100 

-.246 

.491 

.in 

.982 

1.228 

1.473 

s 


100 


101 


.250 


.500 


.750 


1.000 


1.250 


1.500 


FIGURE  9.— PARKHURST'S  STANDARD  DIFFERENTIAL  BONUS  CHART 
OF  A  SET  OF  1,000)  FROM  WHICH  THE  FIGURES  FOR  THE  INDIVIDUAL 
BONUS   CHARTS   SHOWN  IN   FIGURE    10^    SEE    PARAGRAPH   241. 


NOTE  — S  =  Standard  production  for  specific  conditions,  as  defined  by  the 
instruction  card  for  each  job  and  based  on  accurate  stop  watch  observations. 
A.  B  C  or  D  represent  quantity  at  which  bonus  is  to  commence;  once  deter- 
mined for  a  job  this  starting  point  is  never  changed  for  that  job.  Opposite 
the  quantity  per  day  will  be  found  in  each  column  (Bonus  Class)  the  bonus 
per  day  in  dollars  and  cents  for  that  class. 


L 


.0315 

7 

.175 
.207 
.238 
J270 

.3a 

.333 

.364 
.396 
.427 
.459 

.490 
.522 
.553 
.585 
.616 
.648 

jm 

.711 

.742 
.774 

.805 
.837 
.868 
.900 
.931 

.963 

.994 

1.026 

1.057 

1.089 

1.120 
1.152 
1.183 
1.215 
1.246 
1.278 
1.309 
1.341 
1.372 
1.404 
1.435 
1.467 
1.498 
1.530 
1.561 
1.593 
1.624 
1.656 
1.687 
1.719 

1.750 


.036 

8 

.200 
.236 
.272 
.308 

.380 
.416 
.452 
.488 
.524 

.560 
.596 
.632 
.668 
.704 
.740 
.776 
.812 
.848 
.884 

.920 

.956 

.992 

1.028 

1.064 

1.100 
1.136 
1.172 
1.206 
1.244 

1.280 
1.316 
1.352 
1.388 
1.424 
1.460 
1.496 
1.532 
1.568 
1.604 
1.640 
1.676 
1.712 
1.748 
1.784 
1.820 
1.856 
1.892 
1.928 
1.964 

2.000 


.0405 

9 

.225 
.266 
.306 
.347 
J87 
.428 
.468 
.509 
.549 
.590 

430 

.671 
711 
.752 
.792 
.833 
.873 
.914 
.954 
.995 

1.035 
1.076 
1.116 
1.157 
1.197 

1.238 
1.278 
1.319 
1.359 
1.400 

1.440 

1.481 

1.521 

1.562 

1.602 

1.643 

1.683 

1.724 

1.764 

1.805 

1.845 

1.886 

1.926 

1.967 

2.007 

2.048 

2.088 

2.129 

2.169 

2.210 

2.250 


BONUS  CLASSES 
Continued 


.045 

10 
.250 
.295 
.340 
.385 
.430 
.475 
.520 
.565 
.610 
.655 

.700 

.745 

.790 

.835 

.880 

.925 

.970 

1.015 

1.060 

1.105 

1.150 
1.195 
1.240 
L285 
1.330 

1.375 
1.420 
1.465 
1.510 

1.555 

1.600 

1.645 

1.690 

1.735 

1.780 

1.825 

1.870 

1.915 

1.960 

2.005 

2.050 

2.095 

2.140 

2.185 

2.230 

2.275 

2.320 

2.365 

2.410 

2.455 

2.500 


,0495 

11 
.275 
.325 
.374 
.424 
.473 
.523 
.572 
.622 
.671 
.721 

.770 

.820 

.869 

.919 

.968 

1.018 

1.067 

1.117 

1.166 

1.216 

1.265 
1.315 
1.364 
1.414 
1.463 

1.513 
1.562 
1.612 
1.661 

1.711 

1.760 

1.810 

1.859 

1.909 

1.958 

2.008 

2.057 

2.107 

2.156 

2.206 

2.255 

2.305 

2.354 

2.404 

2.453 

2.503 

2.552 

2.602 

2.651 

2.701 

2.750 


.054 

12 
.300 
.354 
.406 
.462 
.516 
.570 
.624 
.678 
.732 
.786 

.840 
.894 
.948 
1.002 
1.056 
1.110 
1.164 
1.218 
1.272 
1.326 

1.380 
1.434 
1.488 
1.542 
1.596 

1.650 

1.704 
1.758 
1.812 
1.866 

1.920 

1.974 

2.028 

2.082 

2.136 

2.190 

2.244 

2.298 

2.352 

2.406 

2.460 

2.514 

2.568 

2.622 

2.676 

2.730 

2.784 

2.838 

2.892 

2.946 

3.000 


.0585 

13 
.325 
.384 
.442 
.501 
.559 
.618 
.676 
.735 
.793 
.852 

.910 
.969 
1.027 
1.086 
1.144 
1.203 
1.261 
1.320 
1.378 
1.437 

1.495 
1.554 
1.612 
1.671 
1.729 

1.788 
1.846 
1.905 
1.963 

2.022 

2.080 

2.139 

2.197 

2.256 

2.314 

2.373 

2.431 

2.490 

2.548 

2.607 

2.665 

2.724 

2.782 

2.481 

2.899 

2.958 

3.016 

3.075 

3.133 

3.192 

3.250 


.063 

14 

.350 
.413 
.476 
.539 
.602 
.665 
.728 
.791 
.854 
.917 

.980 
1.043 
1.106 
1.169 
1.232 
1.295 
1.358 
1.421 
1.484 
1.547 

1.610 
1.673 
1.736 
1.799 
1.862 

1.925 
1.988 
2.051 
2.114 
2.177 

2.240 

2.303 

2.366 

2.429 

2.492 

2.555 

2.618 

2.681 

2.744 

2.807 

2.870 

2.933 

2.996 

3.059 

3.122 

3.185 

3.248 

3.311 

3.374 

3.437 

3.500 


.0675 

15 
.375 
.443 
.510 
.578 
.645 
.713 
.780 
.848 
.915 
.983 

1.050 

1.118 
1.185 
1.253 
1.320 
1.388 
1.455 
1.523 
1.500 
1.658 

1.725 
1.793 
1.860 
1.928 
1.995 

2.063 
2.130 
2.198 
2.265 
2.333 

2.400 
2.468 
2.535 
2.603 
2.670 
2.738 
2.805 
2.873 
2.940 
3.008 
3.075 
3.143 
3.210 
3.278 
3.345 
3.413 
3.48(1 
3.548 
3.615 
3.683 

3.750 


FOR  100  AND  101  UNITS  PER  DAY.     THIS  IS  A  MASTER  TABLE   (ONE 
BONUS    CHARTS    MAY    BE    TAKEN   WHEN    MAKING    THE    INDIVIDUAL 


158 


PARK  HURST    DIFFERENTIAL   BONUS 


method  remains  unchanged.     Furthermore,  he  uses  no  ''ex- 
cursion rates/'    A  job  once  set  is  fixed  forever. 

In  order  not  to  leave  a  wrong  impression  regarding  the 
closing  sentence  of  the  preceding  paragraph,  a  word  of  ex- 
planation is  desirable.  We  are  continually  being  confronted 
with  slight  changes  in  pattern  equipment  or  methods  that 
theoretically  and  fairly  would  even  call  for  the  revision  of 
the  bonus  prices.  Where  this  change  of  equipment  does  not 
make  any  material  difference,  say  only  5  or  lo  per  cent,  we 
in  the  majority  of  cases  let  the  original  bonus  chart  stand. 
We  are  very  careful  not  to  take  advantage  of  any  slight 
alteration  of  equipment  to  reduce  a  price.  We  are  also 
careful  to  let  the  man  realize  that  the  entire  scheme  of  man- 
agement from  start  to  finish  is  one  that  contemplates  fair 
treatment  to  him. 

The  writer  can  cite  cases  of  where  the  head  man  of  a 
molding  gang  has  asked  for  an  additional  laborer  to  dump 
out,  stating  if  this  man  was  supplied  he  could  raise  his  day's 
production  from  70  to  j-j  molds.  This  was  done  on  one 
particular  job  and  the  job  ran  for  weeks  at  the  average  of 
over  76.2  good  castings  per  day.  The  production  of  76.2 
castings,  referred  to,  under  bonus  represents  an  increase  of 
103  per  cent  over  the  old  piece  work  production,  which 
averages  37.5  castings  per  day.  This  same  man  asked  to 
be  told  a  day  before  the  pattern  was  to  go  out  of  the  sand  so 
that  he  and  his  gang  could  put  up  a  record  that  no  other 
gang  could  touch.  It  is  spirit  of  this  kind  which  spells  co- 
operation and  harmony  and  gives  the  greatest  results  under 
any  form  of  management. 

Reference  to  Table  IV  in  section  18  will  give  an  idea 
of  the  majority  of  foundry  operations  covered  by  the  differ- 
ential bonus  being  described.  These  same  principles  have 
been  applied,  however,  to  miscellaneous  work,  such  as  re- 
moving large  quantities  of  dirt,  in  one  instance  a  pile  con- 
taining 2,700  cubic  yards.  Reconstruction  work  has  also 
been  handled  on  the  same  basis  of  remuneration.  In  other 
words,  the  entire  scheme  of  bonus  contemplates  the  applica- 
tion of  this  method  of  remuneration  to  practically  every- 
one within  the  organization. 


FREDERIC    A.    PARKHURST 


159 


Bonus  Chart. 


Form  FAP117 


The  Aluminum  Casting^s  Co. 


BONUS  CHART  138-1  SHEET,  SHEET  1 

Instruction  No Date,  March  8,   1913 

NOTE— The  following  prices  will  be  paid  as  Bonus  in  addition  to  hourly 
wages  based  on  Good  Pieces  which  pass  in  after  this  specific  operation,  except 
that  Defective  not  due  to  work  specified  on  this  Chart  will  not  be  deducted  in 
paying  Bonus. 

These  Bonus  Prices  will  not  be  lowered  no  matter  how  long  the  job  may 
run  with  this  pattern,  core  boxes,  equipment  and  by  the  method  and  desigrn 
specified  in  the  instruction  referred  to  and  with  the  number  of  operatives 
mentioned  below. 

OPERATION— Molding. 

SYMBOL-AA-3S76. 

CUSTOMER— The  Studebaker  Corporation. 

EQUIPMENT — Drag  on  Power  rollover  machine;  cope  on  horses  ram  up  13 
flat  chills  in  cope;  also  tuck  bars,  ram  and   step  off. 

OPERATIVES  AND  CLASS  NO.— 1  Molder,  Class  7;  2  Helpers,  Class  5. 


Good 

Bonus, 

Bonus, 

Good 

Bonus, 

Bonus, 

Castings. 

Class  5. 

Class  7. 

Castings. 

Class  5. 

Class  7 

140 

.575 

.805 

171 

.924 

1.293 

141 

.586 

.821 

172 

.935 

1.309 

142 

.598 

.837 

173 

.946 

1.325 

143 

.609 

.852 

174 

.958 

1.34 

144 

.62 

.868 

175 

.969 

1.356 

145 

.631 

.884 

176 

.98 

1.372 

146 

.634 

.90 

177 

.99 

1.388 

147 

.654 

.915 

178 

1.003 

1.404 

148 

.665 

.931 

179 

1.014 

1.419 

149 

.676 

.947 

180 

1.025 

1.435 

150 

.688 

.963 

181 

1.036 

1.451 

151 

.699 

.978 

182 

1.048 

1.467 

152 

.71 

.994 

183 

1.059 

1.482 

153 

.721 

1.01 

1S4 

1.07 

1.499 

154 

.733 

1.036 

185 

1.081 

1.514 

155 

.744 

1.041 

186 

1.093 

1.53 

156 

.755 

1.057 

187 

1.104 

1.545 

157 

.766 

1.073 

188 

1.115 

1.561 

158 

.778 

1.089 

189 

1.126 

1.577 

159 

.789 

1.104 

190 

1.138 

1.593 

160 

.80 

1.12 

191 

1.149 

1.608 

161 

.811 

1.136 

192 

1.16 

1.624 

162 

.823 

1.152 

193 

1.171 

1.64 

163 

.834 

1.167 

194 

1.183 

1.656 

164 

.845 

1.183 

195 

1.194 

1.671 

165 

.856 

1.199 

196 

1.205 

1.687 

166 

.868 

1.215 

197  . 

1.216 

1.703 

167 

.879 

1.23 

198 

1.228 

1.719 

168 

.89 

1.246 

199 

1.239 

1.734 

169 

.901 

X.TfO, 

200 

1.25 

1.75 

170 

.913 

1.278 

•  •  • 

FIGURE  10.— BONUS  CHARTS  ISSUED  TO  EACH  EMPLOYE  (OR  GROUP 
OF  EMPLOYES).  THE  FIGURES  ARE  TAKEN  FROM  THE  STANDARD 
DIFFERENTIAL  BONUS  CHARTS  ILLUSTRATED  IN  FIG.  9,  SEE  PARA- 
GRAPH  245. 

Another  application  may  be  described  in  reference  to  a 
bonus  scheme,  which  has  been  worked  out  for  the  remunera- 
tion of  the  inspection  force.  This  is  termed  "quality 
bonus."  Figures  have  been  determined  representing  what 
the  I  GO  per  cent  mark  for  quality  would  be  for  each  of  the 
following  factors : 

A     Foundry  Defective  Castings. 

B     Total  Cost  of  Repairing,  Soldering  and  Welding. 

C     Percentage  of  Defective  Castings  returned  from  customers. 


i6o 


PARKHURST    DIFFERENTIAL    BONUS 


|r':| 

■h 


The  figures  which  have  been  determined  for  each  of  the 
above  items  A,  B  and  C,  represent  an  efficiency  mark  ap- 
plicable to  quality  which  nets  all  of  the  inspectors  a  maxi- 
mum bonus.  The  differential  of  this  bonus  is  figured  in 
exactly  the  same  way  as  described  above  for  other  work. 
If  the  above  marks  are  realized  to  the  extent  of  80  per  cent 
of  the  maximum,  the  bonus  commences  and  by  the  usual 
differential  grades  along  to  the  100  per  cent  mark. 

Another  interesting  application  of  this  differential  bonus 
method  of  payment,  is  the  application  of  this  principle  to 
brass  meltng  in  the  coke  furnaces  in  the  Detroit  plant  of 
the  Aluminum  Castings  Co.  This  same  method  will  be  ap- 
plied to  the  brass  melting  in  the  Cleveland  plant  by  the  end 
of  the  year. 

The  following  is  a  copy  of  the  differential  bonus  chart 
3574D  covering  the  details  of  this  brass  melting  bonus. 
The  description  of  the  way  this  is  handled,  as  shown  by  the 
chart  referred  to,  is  self-explanatory. 

Bonus  Chart  No.  3574D 
Differential  Bonus  for  Melting  Lsmux  Metal 

The  following  prices,  based  on  man-furnace  hours  per  heat,  will 
be  paid  in  addition  to  hourly  wages  for  time  consumed  on  the  job  by 
the  Lynux  melting  gang,  based  on  a  12-hour  furnace  day. 

The  metal  will  be  sent  to  the  furnaces  in  weighed  charges.  It  is 
to  be  melted  and  delivered  to  skimming  box  (ready  for  the  pouring 
gang)  at  a  pouring  temperature  high  enough  for  the  class  of  work 
for  which  it  is  intended. 

Furnaces  are  to  be  operated  on  natural  draft,  using  coke  as  fuel, 
which  coke  will  be  delivered  into  bins  back  of  furnaces,  but  is  to  be 
broken  by  the  melting  gang.  A  half  hour  will  be  allowed  for  building 
a  fire.  Power  hoists  have  been  provided  for  lifting  the  pots  from 
furnaces. 

The  different  kinds  of  Lynux  are  to  be  graded  by  the  foreman  ac- 
cording to  time  required  for  melting  and  a  chart  will  be  issued  showing 
the  "equivalent  in  standard  heats"  for  any  number  of  pounds  of  the 
various  grades.  The  standard  heat  is  regarded  as  grade  6—240  pounds 
in  two  hours. 

The  computation  for  "man-furnace  hours  per  heat"  is  to  be  made 
as  follows: 

(1)  Compute  from  the  daily  job  time  cards  the  total  man-hours 
spent  by  the  melting  gang. 

(2)  The  sum  of  the  hours  which  each  individual  furnace  runs 
will  give  the  total  furnace  hours. 


FREDERIC    A.    PARKHURST 


161 


(3)  For  each  heat  melted  compute  from  the  table  its  "equivalent 
in  standard  heats"  and  the  sum  of  these  gives  the  total  standard  heats. 

(4)  (31/2  total  man-hours)  -f total  furnace  hours=total  man-fur- 
nace hours. 

(5)  Total  man-furnace  hours=Man-furnace  hours  per  heat. 

Total  standard  heats. 

Delays  caused  by  conditions  beyond  the  control  of  the  melting  gang 
will  be  allowed  for.  These  prices  will  not  be  changed  as  long  as  present 
conditions  of  operation  remain  the  same. 

Differential 

Bonus  Class  5—0.01406;  Bonus  Class  6—0.01687 

Bonus  based  on  man-furnace  hours  per  standard  heat  as  computed 
from  record  of  daily  charges  and  heat  equivalent  table.  (See  Table 
III.) 


hrs, 


Man 

Melters* 

Each 

Man 

urnace 

bonus 

Helper  bonus 

furnace 

per  heat. 

Class  6. 

Class  5. 

hrs.  per  heat. 

Class  6. 

Class  5 

5.00 

$1,162 

$  .969 

4.50 

$1,331 

$1,109 

4.95 

1.179 

.983 

4.45 

1  atJ^IO 

1.123 

4.90 

1.196 

.997 

4.40 

1.365 

1.137 

4.85 

1.213 

1.011 

4.35 

1.382 

1.151 

4.80 

1.230 

1.025 

4.30 

1.398 

1.165 

4.75 

1.247 

1.039 

4.25 

1.415 

1.179 

4.70 

l.»>3 

1.053 

4.20 

1.432 

1.194 

4.65 

1.280 

1.067 

4.15 

1.449 

1.206 

4.60 

1.297 

1.061 

4.10 

1.466 

1.222 

4.55 

1.314 

1.095 

4.05 

1.483 

1.236 

4.00 

1.500 

1.250 

In  computing  the  bonus  each  day  reference  lias  to  be 
made  to  the  Brass  Furnace  Heat  Equivalent  Table  2  here- 
with. The  Daily  Metal  Room  Report  gives  a  record  of 
each  different  alloy  number.  Each  alloy  number  belongs 
in  one  of  the  metal  groups  5  to  10  inclusive.  The  sum  of 
the  equivalent  heat  figures  for  each  group  melted  each  day 
divided  into  the  total  man  furnace  hours  for  that  day  gives 
the  man  furnace  hours  per  heat. 

The  combination  of  man  hours  and  man  furnace  hours 
enables  us  to  maintain  a  minimum  of  labor  and  assures  the 
use  of  a  minimum  number  of  furnaces  per  day.  Other- 
wise, additional  furnaces  might  be  fired  up  to  get  a  few 
extra  heats  at  an  excessive  cost  for  fuel.  The  method  has 
been  in  vogue  for  several  months  and  has  worked  out  very 
successfully.  Figures  in  the  heat  equivalent  table  are  based 
on  the  results  of  actual  time  studies  for  the  various  groups 
of  metal  and  for  varying  charges.    These  figures  check  out 


J*  I 

I 


t  i 


I 


162  PARKHURST    DIFFERENTIAL   BONUS 


TABLE   III 

BRASS  FURNACE  "HEAT"  EQUIVALENT  TABLE 

(Used  in  connection  with   Differential  Bonus   Chart   No.  3574D. 

Lynux  Melting  Practice) 


FREDERIC    A.    PARKHURST 


1.    Stan 

dard  Heat- 

-240  lb.  charge, 

Group  6  in  2  hours. 

Pounds 

r 

—Standard   Heat    Equivalents- 

> 

per 

Metal  Group 

charge. 

5 

6 

7 

8 

9 

10 

S 

.30 

.25 

.214 

.082 

.052 

.129 

10 

.42 

.35 

.300 

.100 

.056 

.133 

15 

.48 

.40 

.343 

.117 

.059 

.137 

20 

.54 

.45 

.386 

.133 

.062 

.141 

25 

.552 

.46 

.394 

.150 

.066 

.145 

JO 

.565 

.47 

.403 

.153 

.069 

.149 

35 

.582 

.485 

.416 

.156 

.073 

.153 

40 

.600 

.500 

.428 

.159 

.076 

.157 

45 

.615 

.512 

.438 

.162 

.079 

.162 

50 

.630 

.525 

.450 

.166 

.082 

.166 

55 

.645 

.537 

.460 

.169 

.085 

.170 

60 

.660 

.550 

.472 

.173 

.069 

.174 

65 

.675 

.562 

.482 

.176 

.092 

.178 

70 

.690 

.575 

.493 

.180 

.096 

.183 

75 

.705 

.587 

.503 

.183 

.099 

.187 

80 

.720 

.600 

.514 

.186 

.103 

.191 

85 

.735 

.612 

.525 

.190 

.106 

.195 

90 

.750 

.625 

.536 

.193 

.110 

.199 

95 

.765 

.637 

.546 

.197 

.113 

.204 

100 

.780 

.650 

.557 

.200 

.117 

.208 

105 

.795 

.662 

.568 

.203 

.120 

.212 

110 

.810 

.675 

.578 

.206 

.124 

.216 

115 

.825 

.687 

.589 

.210 

.127 

.220 

120 

.840 

.700 

.600 

.213 

.130 

.225 

125 

.855 

.712 

.611 

.216 

.133 

.229 

130 

.870 

.725 

.622 

.219 

.137 

.233 

135 

.885 

.737 

.632 

.223 

.140 

.237 

140 

.900 

.750 

.643 

.227 

.143 

.241 

145 

.915 

.762 

.654 

.230 

.147 

.246 

150 

.930 

.775 

.664 

.234 

.150 

.250 

155 

.945 

.787 

.675 

.237 

.153 

.254 

160 

.960 

.800 

.686 

.240 

.157 

.258 

165 

.975 

.812 

.696 

.344 

.160 

.262 

170 

.990 

.825 

.707 

.247 

.163 

,2S7 

175 

1.005 

.837 

.718 

.250 

.166 

.271 

180 

1.020 

.850 

.728 

.253 

.170 

.275 

185 

1.035 

.862 

.739 

.256 

.173 

.279 

190 

1.050 

.875 

.750 

.260 

.176 

.2M 

195 

1.065 

.887 

.760 

.2M 

.180 

.288 

200 

1.080 

.900 

.771 

.266 

.183 

.292 

205 

1.095 

.912 

.782 

.269 

.186 

.296 

210 

1.110 

.925 

.792 

.272 

.190 

.300 

215 

1.125 

.937 

.802 

.276 

.193 

.304 

220 

1.140 

.950 

.813 

.279 

.196 

.309 

225 

1.155 

.962 

.824 

.282 

.200 

J13 

230 

1.170 

.975 

.834 

.285 

.203 

.317 

235 

1.185 

.987 

.845 

.288 

.206 

.321 

240 

1.200 

1.000 

.857 

.291 

.210 

J25 

very  close  in  practice  and  the  first  day  the  furnace  gang 
worked  on  this  schedule  they  earned  bonus. 

Fig.  1 1  shows  a  very  interesting  large  crank  case  job  run 
on  the  floor  under  bonus  early  in  1912.    The  record  of  this 


163 


job  during  38  days'  run — four  duplicate  sets  of  equipment, 
is  as  follows : 


• 

i 

• 
U 

S 
0 

0 

& 

V 

> 

JO 

V.    good 
per  9 
hr.  day. 

olders 
good. 

*3 

V 

fid 

^  c 

CO   0 

. 
** 
m 

8 

♦J 
0 

ost  per 
good  case. 

PU 

5? 

H 

0 

15 

< 

S 

Q 

QpQ 

H 

u 

1 

1,039 

3,395.0 

0 

37.72 

27.55 

28.6 

$23.27 

$  9.121 

$33,391 

$1,175 

2» 

1,140 

3,268.5 

0 

36.31 

31.40 

32.2 

25.64 

12.926 

38.566 

1.228 

3 

1,042 

3,398.5 

0 

37.64 

27.70 

29.1 

23.06 

9.607 

32.667 

1.180 

5 

984 

3,310.0 

0 

36.77 

26.75 

28.3 

34.06 

8.832 

32.882 

1.230 

Averages  of  four 

patterns 

28.35 

29.55 

$24,005 

$10,121 

$34,126 

$1,203 

J  ' 


♦Gang  on  pattern  No.  2  was  a  picked  gang  considered  the  fastest 
and  best  workers  in  the  shop,  always  worked  together  and  received 
extra  high  wages  owing  to  their  efficiency. 

Old  average  good  production  under  combination  of  day  wages  and 
premium — 15.15  cases. 

Old  average  good  production  cost  under  combination  of  day  wages 
and  premium — ^$1,196  per  case. 

Bonus  average  production  increase,  87.2  per  cent  per  case. 

Bonus  average  cost  increased  $0,007  per  case. 

This  is  an  example  of  an  occasional  case  where  the  direct  labor 
cost  is  not  reduced.  The  saving  is  thus  confined  to  less  overhead  and 
greater  capacity  due  to  increased  production. 

Old  foundry  defective  from  all  causes  when  netting  15.15  good 
cases  per  day  was  25  per  cent. 

Foundry  defective  from  all  causes  under  intense  bonus  production 
when  netting  28.35  good  cases  per  day  was  but  9.83  per  cent. 

Foundry  defective  loss  under  intense  bonus  production  and  Scien- 
tific Management  methods  was  reduced  60.7  per  cent. 

Average  bonus  equals  42.2  per  cent  over  regular  day  wages. 

Fig.  12  shows  a  typical  core  job,  on  which  the  average 

daily  production  is  1,305  cores  per  nine-hour  day.  The 
core  illustrated  is  a  Packard  hub  cap  core. 

Fig.  13  represents  another  large  floor  job.  This  is  a  four- 
cylinder  oil  pan  for  which  three  sets  of  equipment  were 
made  to  assure  the  customer  of  a  production  of  75  good 
castings  per  day.  A  great  many  thousand  of  these  pans 
have  been  made  of  this  design.  The  average  production 
runs  from  108  to  115  molds  per  nine-hour  day. 

Another  typical  core  job  is  illustrated  in  Fig.  14.  This 
is  a  transmission  bearing  core  and  the  average  production 
is  1,620  cores  per  nine-hour  day. 

Fig.  15  illustrates  a  transmission  job  run  by  a  molding 
gang  of  four  men  and  two  laborers  employed  in  dumping 


164 


PARK  HURST    DIFFERENTIAL   BONUS 


out  and  cutting  sand.  The  production  on  this  job  averages 
160  to  180  good  castings  per  nine-hour  day. 

Fig.  16  illustrates  a  typical  bench  job.  This  is  an  intake 
manifold,  on  which  the  average  production  is  150  molds 
per  nine-hour  day.  Work  of  this  kind,  as  well  as  all  other 
bench  and  squeezer  work  is  covered  by  the  standard  data  de- 
scribed in  Section  13.  Fig.  8  referred  to  in  Section  13  illus- 
trates a  small  variety  of  the  work  covered  by  these  standard 
tables. 

Before  closing  with  the  subject  of  the  application  of  dif- 
ferential bonus,  attention  is  called  to  Table  IV.  The  object 
of  listing  so  many  different  items  rather  than  expressing 
the  results  obtained  in  total  lump  figures,  is  to  show  up  the 
great  difference  in  production  increases  and  cost  decreases 
between  different  jobs.  In  other  words,  it  w'ill  be  noted  that 
production  increase  runs  from  only  a  few  per  cent  to  over 
700  per  cent.  The  figures  in  the  cost  decrease  column  in  a 
few  instances  show  practically  no  decrease  in  cost  and  in 
others  the  decrease  is  80  or  more  per  cent.  These  figures 
illustrate  better  than  can  be  done  in  any  other  way,  the  great 
variations  that  exist  in  the  average  job,  both  as  to  the  pro- 
duction standard  and  direct  costs.  In  other  words,  under 
ordinary  methods,  it  is  comparatively  easy  for  jobs  to  be 
limited  in  production  due  to  the  apparent  similarity  be- 
tween one  job  and  another.  These  figures  also  show  up 
the  great  difference  between  what  in  the  judgment  of  the 
average  good  mechanic  should  be  a  day's  work  and  what 
actually  should  be  realized  when  the  facts  are  accurately 
determined. 

In  studying  over  the  figures  representing  the  percentage 
of  cost  reduction,  as  shown  in  Table  IV,  it  can  be  seen 
that  there  is  a  very  wide  difference  on  some  jobs  between 
the  production  increase  and  the  cost  decrease.  In  other 
words,  in  some  cases  the  cost  decrease  is  very  little  and  the 
production  increase  is  very  high.  We  also  have  the  reverse 
condition  where  the  cost  decrease  is  high  and  the  production 
increase  is  much  lower.  All  of  these  go  to  prove  the  neces- 
sity which  the  job  should  run,  as  well  as  the  proper  balance 
of  labor  required  to  run  that  job  efficiently. 


u 


LECTURE  XXVII 

DEPARTMENTAL  AND   PLANT   EFFICIENCY    BONUS 

27-A.    Departmental  Efficiency   Bonus 
27-B.     Plant  EpFiaENcv  Bonus. 

This  lecture  will  cover  certain  applications  of  departmental  and 
plant  efficiency  bonus,  but  owing  to  the  limited  time,  the  subject  must 
be  most  superficially  dealt  with.  The  student  is  referred  to  the  author's 
"Scientific  Time  Study  and  Differential  Bonus"  now  in  the  course  of 
preparation,  for  complete  information  on  the  whole  subject  of  special 
and  efficiency  bonuses. 

27-A.     Departmental  Efficiency  Bonus 

The  foregoing  lectures  have  introduced  in  considerable 
detail,  different  phases  of  time  study  and  bonus  work.  Vari- 
ous applications  of  bonus  based  on  standard  elemental  sub- 
operation  times  have  been  referred  to,  always  in  connection 
with  some  specific  job  or  operation.  To  complete  the  en- 
tire scheme  of  differential  bonus  as  used  by  the  author,  it 
is  necessary  to  provide  bonuses  for  the  department  heads 
or  department  executives  w^ho  have  to  do  with  the  operation 
of  the  department  as  a  whole.  Departmental  efficiency 
bonuses  cannot  well  be  determined  until  substantially  all  of 
the  direct  and  indirect  operations  or  jobs  have  been  success- 
fully placed  on  bonus. 

In  an  attempt  to  solve  the  problem  of  equitably  applying 
differential  bonus  to  departmental  and  plant  efficiencies, 
some  rather  extensive  studies  had  to  be  conducted  to  bring 
certain  elements  of  indirect  and  technical,  as  well  as  clerical 
labor,  under  control  and  to  schedule  same  on  a  bonus  pre- 
paratory to  getting  the  departmental  efficiencies  themselves. 
These  studies  involved  the  determining  of  necessary  factors 
for  control  of  furnace  performance,  pouring  gangs,  chill 
sorters,  wire  straighteners,  sand  and  metal  handling,  sand 
mixing,  knocking  out  cores,  inspection,  trimming,  soldering, 
welding,  calculating  and  posting  bonus  slips,  etc.,  etc.     For 

165 


ni 


m 


r 


i66 


DEPARTMENTAL    EFFICIENCY    BONUS 


instance,  I  give  below  a  copy  of  Bonus  Chart  9053D,  which 
represents  an  efficiency  bonus  chart  for  carrying  and  pour- 
ing metal.  It  is  an  example  of  a  study,  which,  though  not 
particularly  complex  in  itself,  took  considerable  time  to  com- 
plete and  had  to  be  completed  before  the  bonus  could  be 
issued. 

BONUS  CHART  9053D,  MAY  1,  1917;  DEPT.  IF, 

BONUS  CLASS  4 

Efficiency  Bonus  Chart  for  Carrying  and  Pouring  Lynite  Metal 

TO  IM  AND  IMa  When  Using  a  Hand  L.\dle  and 

Two  Wheel  Carrier 

Standards : 

.103  man  minutes  per  pound  metal  poured  in  IM    unit. 
.164  man  minutes  per  pound  metal  poured  in  IMa  unit. 

The  following  differential  bonus  will  be  paid  in  addition  to 
hourly  wages,  based  on  the  number  of  pounds  of  metal  poured 
by  the  men  who  used  the  hand  ladles  and  the  two  wheel  carriers 
in  IM  and  IMa  department,  except  that  all  defective  castings  due 
to  the  carelessness  of  the  pouring  gang  will  be  deducted  when 
paying  bonus. 

The  following  instructions  and  specifications  must  be  strictly 
followed : 

Equipment : 

The  following  equipment  is  to  be  used  when  pouring  Lynite 
metal  in  IM  foundry  unit: 

1 — An  iron  hand  ladle  which  weighs  when  empty  26  pounds 
and  when  full  of  molten  aluminum  metal  within  1"  from 
the  top  will  hold  28  pounds  of  metal;  with  the  ladle  use  a 
two  wheel  carrier  which  can  be  pushed  over  the  floor  with 
very  little  effort. 

2 — A  pyrometer  is  located  at  the  North  entrance  of  IM,  in  a 
convenient  place  so  every  pot  can  be  tested  for  correct 
temperature;  the  man  carrying  metal  must  skim  every  pot 
while  the  temperature  is  taken. 

3 — Time  allowance  is  figured  in  the  standard  time  to  keep  all 
equipment  in  first  class  condition.  Each  pouring  pot  must 
be  cleaned  and  blackened  every  morning  and  the  carrier 
oiled.  When  not  in  use  all  equipment  is  to  be  kept  in  its 
proper  place. 


15  ) 


FREDERIC    A.    PARKHURST 


167 


4— The  pouring  gang  must  keep  the  floor  clean  around  the 
pyrometer  for  a  radius  of  five  feet.  They  must  not  allow 
any  accumulation  of  skimmings  or  spilled  metal  to  collect 
at  this  place. 


Method : 


The  method  used  in  handling  the  melted  metal  with  hand 
ladle  and  carrier  is  as  follows :  One  man  operates  the  hand  ladle. 
He  dips  the  metal  out  of  the  furnace  with  the  same  ladle  he  used 
to  carry  the  metal.  The  ladle  is  then  placed  in  the  two  wheeled 
carrier  and  the  man  pushes  carrier  along  on  the  floor  to  the  pyro- 
meter. Here  the  metal  is  tested  for  temperature,  and  each  ladle 
full  is  skimmed.  The  metal  is  then  taken  where  it  is  needed  and 
poured.  The  operator  returns  to  the  furnace  ready  for  another 
ladle  of  metal. 


Tally : 


The  tally  will  be  taken  from  the  production  report  and  listed 
on  a  special  sheet,  a  sample  of  which  is  incorporated  in  this  chart. 


Gr.  W^.  Gr.  Wgt. 
No.       Pounds    Pounds 
Piece       Cstgs.         Per         Metal     Man 
Dept.   Symbol    Poured    Casting    Poured     No. 


Time  Gang 

Worked       Dept.       Effi- 
Minutes    Worked  ciency  Bonus 


The  weights  of  each  casting  must  include  all  gates,  sprues, 
risers,  etc.,  and  the  total  weight  of  metal  poured  will  be  computed 
by  multiplying  the  gross  castings  weight  by  the  number  of  cast- 
ings made  from  each  pattern.  The  total  for  all  patterns  will  give 
the  total  weight  of  metal  carried  for  the  day.  All  defective  cast- 
ings due  to  anv  fault  of  the  pouring  gang  will  he  deducted  when 
figuring  bonus  and  the  gang  will  lose  credit  for  the  pounds  of 
metal  in  every  defective  casting  they  make. 

Standard  Times : 

The  standard  time  by  which  the  bonus  will  be  figured  when 
carrying  metal  in  hand  ladle  using  two  wheel  carrier  from  any 
part  in  IF  to  any  point  in  IM  unit  is  .105  man  minutes  per  pound 
of  metal  poured. 

The  standard  time  by  which  the  bonus  will  be  figured  when 
carrying  metal  in  hand  ladle  using  two  wheel  carrier  from  any 
point  in  IF  to  any  point  in  IMa  is  .164  man  minutes  per  pound 
of  metal  poured. 

Method  of  Figuring  Bonus : 

The  bonus  will  be  figured  daily  from  the  production  report 
and  when  the  total  efficiency  reaches  80%,  bonus  in  Class  4  will 
be  paid  in  proportion  to  the  time  each  man  works  on  the  job.  A 
specimen  sheet  showing  the  computation  of  the  bonus  is  incor- 
porated in  this  chart. 


r 


1^ 


1 68 


DEPARTMENTAL    EFFICIENCY    BONUS 


■ 


k 
k 


Example  of  Figuring  Bonus: 

Total  pounds  of  metal  poured  in  IM     10,000  pounds 

"    IMa     5,000  pounds 
10,000  X  .103  =  1030  standard  man  minutes 
5,000  X. 164=   820 

Total  1850 

4  men  worked  9  hours  on  the  job. 

4  X  540  =  2160  actual  man  minutes. 

Then  the  standard  man  minutes  divided  by  the  actual  man 
minutes  worked  on  the  job  equals  the  working  efficiency  of  the 
gang. 

1850 

=  85.5%    Efficiency 

2160 

85.5%  Bonus,  Class  4,  pays  $.739  bonus  for  9  hours  for  each  man. 

The  following  prices  will  not  be  lowered  no  matter  how  long 
the  job  may  operate  provided  the  method  and  equipment  specified 
in  this  chart  are  not  changed. 


EFFICIENCY  BONUS  CHART  9053D, 

BONUS  CLASS  4 

Standard : 

.103  Man  minutes  per  pound  for  all  metal  poured  in  IM 

Differential  for  1%  Efficiency  =  $.018 


"    IMa 


Gang 
Efficiency 
9  hrs. 

Bonus 

Paid 

9  hrs. 

Gang 

Efficiency 

9  hrs. 

Bonus 

Paid 

9  hrs. 

80 

.640 

91 

.838 

81 

.658 

92 

.856 

82 

.676 

93 

.874 

83 

.694 

94 

.892 

84 

.712 

95 

.910 

85 

.730 

96 

.928 

86 

.748 

97 

.946 

87 

.766 

98 

.964 

88 

.784 

99 

.982 

89 

.802 

100 

1.000 

90 

.820 

In  reference  to  the  above  bonus  chart,  the  following  tabulation 
shows  a  record  under  date  of  May  1,  1917,  of  how  the  tally  was 
kept  on  this  job  for  the  several  men  employed. 


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170 


DEPARTMENTAL    EFFICIENCY    BONUS 


h 

¥ 
I 


As  another  example  of  what  is  involved  in  the  preparation  prior 
to  the  determination  of  departmental  efikiencies,  the  following  record 
of  a  study  in  connection  with  department  IQ  devoted  to  the  mixing  of 
core  sand,  will  be  of  interest: 

TIME  STUDIES  IN  iQ 

THE  PROBLEM 

The  work  in  iQ  Department  consists  of  a  great  number 
of  miscellaneous  operations,  all  of  which  pertain  to  the 
mixing"  of  core  sand. 

The  sand  is  unloaded  from  the  cars  in  the  storage  sheds 
and  storage  yards  and  used  from  storage  as  conditions 
of  production,  demand.  The  outline  of  sand  storage  plan 
(a  copy  of  which  accompanies  this  report)  shows  that 
there  are  twenty-two  different  storage  sheds  and  one  stor- 
age yard,  all  at  different  distances  from  the  sand  mixing 
room.  The  sand  is  brought  from  the  storage  shed  to  the 
mixing  room  in  wheel  barrows  and  dumped  in  special  bins 
provided  at  mixing  machines. 

Before  the  time  studies  were  taken  it  was  necessary  to 
slightly  rearrange  the  layout  of  the  sand  mixing  department 
and  blue  prints  show  the  arrangement  before  and  after  the 
change  was  made.  The  big  item  in  this  change  was  keep- 
ing the  sand  wheelers  from  delaying  the  work  of  the  man 
who  fills  the  pails.  The  new  arrangement  as  shown  on  the 
blue  print  shows  how  the  wheelers  fill  the  storage  spaces 
from  behind  and  do  not  interfere  with  the  men  who  fill  the 
measuring  pails  for  the  machines. 

The  other  miscellaneous  operations  in  iQ  Department 
are  as  follows : 

1.  Filling  the  measuring  buckets  for  mixing  machines. 

2.  Mixing  regular  standard  and   special  batches  with  machines. 

3.  Mixing  special  standard  batches  with  small  electric  riddle. 

4.  Transferring  of  the  mixing  sand  by  the  Lary  car  to  the  core- 
rooms. 

5.  Grinding  rosin  and  sweeping  up  the  floor  and  miscellaneous 
trips  to  the  stock-room  for  supplies. 

These  operations  were  carefully  investigated  and  studied 
with  watches  until  the  times  and  standard  methods  were 
established. 


FREDERIC    A.    PARKHURST 


Method 


171 


The  method  used  to  establish  the  standards  was  as  fol- 
lows : 

The  first  job  study  was  for  wheeling  sand  from  the  stor- 
age bins  to  the  mixing  machine.  Several  different  men 
were  taken  and  observations  made  on  their  work.  We 
wanted  to  select  a  man  who  was  steady  and  reliable  in  this 
work  and  a  good  average  worker.  Observations  were  made 
on  eight  men  until  we  found  the  man  who  met  the  physical 
qualifications  the  conditions  required.  The  elemental  de- 
tailed studies  were  studied  until  they  were  all  standardized 
as  follows : 

1.  Trip  from  the  mixing  room  to  the  storage  shed,  wheel-barrow 
empty,  standardized  on  a  basis  of  the  distance  per  foot. 

2.  Load  wheel-barrow  with  sand,  standardized  on  a  basis  of  six 
buckets  per  load  or  three  hundred  pounds  per  trip. 

3.  Trip  from  the  storage  shed  to  the  mixing  room,  wheel-barrow 
loaded,  standardized  on  a  basis  of  per  foot  of  distance  traveled. 

4.  Dump  sand  in  storage  bin,  standard  for  all  loads. 

When  these  standards  were  determined  they  were  used 
to  figure  the  standard  times  per  trip  to  storage  bins  and 
bonus  was  established  on  this  standard  time  per  trip.  (Op- 
erations 2  and  4  are  standards  for  all  trips;  Operations  i 
and  3  depend  on  the  distance  traveled.) 

In  order  to  have  a  good  check  on  our  standard  time  we 
have  selected  several  different  men  and  made  complete  day's 
observation  on  their  work.  We  found  these  men  made 
bonus  for  the  total  day's  work  for  several  days  in  succession 
and  were  anxious  to  be  put  on  bonus. 

Other  operations  have  been  timed  and  studied  in  the  same 
manner  and  in  every  case  these  elemental  operations  were 
standardized  and  often  used  on  several  different  operations. 

Based  on  the  above,  bonus  chart  9036D,  dated  Feb.  12, 
1917,  applying  to  department  DiQ  was  issued  reading  as 
follows : 


''!?; 


172 


DEPARTMENTAL    EFFICIENCY    BONUS 


FORMULA  USED  IN  COMPUTING  THE  STANDARD 
TIMES  FOR  WHEELING  SAND  FROM  STOR- 
AGE BINS  TO  MIXING  MACHINES 

(WxL)  plus  (DxT)  plus  K  plus  (dxt)  equals  Time 
Allowed  for  wheeling  standard  load  of  sand  any  dis- 
tance, where 

W  =  weight  of  sand 

L    =  standard  loading  time  per  pound 

D    ==  distance  wheeling  load 

d     =  distance  wheeling  empty  wheelbarrow 

T    =  standard   time   for  wheeling  a  standard  300  pound  load  a 

distance  of  1  foot 
t     =  standard    time    for   wheeling    empty    wheelbarrow    distance 

of  1  foot 
K   =  standard  time  dumping  load. 

The    following   are   the   values    for    the  items    listed 
above,  these  all  \ieing  based  on  detail  time  studies. 

W  =  300  pounds  sand 


L 
D 
T 

d 
t 

K 


=  .00415  minute 

=  distance  wheeling  loaded  wheelbarrow 

=  .054  minute  time  to  wheel  standard  30O  pound  load  distance 
of  1  foot 

=  distance  to  wheel  empty  wheelbarrow 

=  .004  minute  time  to  wheel  empty  wheelbarrow  distance  of 

1  foot 
=  .22  minute  time  to  dump  load. 


Fatigue  allowances  were  as  follows : 

10%    additional    time    for    all   trips   beyond   one-half   the    distance 
down  the  shed. 

20%  additional  time  for  all  trips  that  were  not  further  than  one- 
half  the  distance  down  the  shed. 

BONUS  CHART  9036D,  FEB.  12,  1917;  DEPT.  IQ, 

BONUS  CLASS  4 

Bonus  Chart  for  Wheeling  Sand  in   iQ  from  the 

Various  Sand  Sheds  and  Yard  Storage  to 

THE  Mixing  Machines,  300  Pounds  of 

Sand  for  a  Wheel-Barrow  Load 

Operations : 

Load  wheel-barrow. 
Wheel  to  mixing  machines. 
Dump  sand  in  bins. 
Return  to  sand  storage. 


FREDERIC    A.    PARKHURST 


173 


Equipment : 

All  sand  is  to  be  wheeled  in  a  metal  wheel-barrow  with  ca- 
pacity of  three  hundred  pounds  or  more  of  sand.  A  good  sand 
shovel  which  will  hold  not  less  than  twenty-one  pounds  of  sand. 

Method : 

The  sand  is  loaded  in  wheel-barrow  not  less  than  three  hun- 
dred pounds  per  load  and  wheeled  to  bins  in  mixing  room  where 
it  is  dumped  into  the  proper  bins. 

Method  of  Tally  and  Computation  of  Bonus : 

Example  of  Figuring  Bonus : 

A  tally  clerk  stationed  at  the  entrance  of  the  mixing  room 
records  the  man's  numbers,  the  bins  from  which  he  wheels  the 
sand  and  the  clock  time  each  load  is  delivered.  The  number  of 
wheel-barrow  loads  from  each  bin  is  multiplied  by  the  respective 
standard  man  minutes  allowed.  The  standard  man  minutes  di- 
vided by  the  actual  minutes  worked  by  the  operator  equals  the 
working  efficiency  and  bonus  will  be  paid  according  to  the  working 
efficiency  of  the  operator. 

In  case  a  weighing  scale  is  installed,  all  sand  will  be  weighed. 
The  total  weight  of  sand  wheeled  by  one  man  from  each  storage 
bin,  multiplied  by  the  standard  time  per  pound  for  that  respective 
bin  equals  the  standard  minutes.  The  standard  minutes  divided  by 
the  actual  minutes  equals  the  working  efficiency. 

Bonus  will  be  paid  according  to  the  working  efficiency  of  the 
operator. 

The  following  is  a  list  of  standard  times  per  trip  and  standard 
time  per  pound  of  sand  wheeled: 


Standard  Time  in 

Standard  Time  in 

From  Door 

Minutes  per  trip 

Minutes  per  pound 

1 

2.24 

.00746 

2 

2.44 

.00748 

4 

2.64 

.00880 

5 

2.45 

.00817 

6 

2.98 

.00993 

8 

3.20 

.01067 

10 

3.43 

.01143 

12 

3.65 

.01216 

14 

3.73 

.01242 

16 

3.93 

.01310 

18 

4.20 

.01400 

19 

3.81 

.01270 

20 

4.51 

.01503 

21 

4.20 

.01400 

22   (yard) 

5.39 

.01799 

23 

4.51 

.01503 

SIh 


if 


m 


^: 


;•   'I 


174 


DEPARTMENTAL    EFFICIENCY    BONUS 


Example  of  Figuring  Bonus: 

Suppose   one   man   wheeled   thirty-eight   loads   of    sand    from 
pile  in  the  yard,  seventy-five  loads  of  dry  sand  from  door  1,  and 
twenty  loads  from  door  14.     This  man  worked  nine  hours  on  the 
job.     Determine   his  bonus. 
38  loads  from  yard     X  5.39  Standard  Min.  Allow  =  204.82  Std.  Min. 
75      "        "      door     X2.24         "  "  "        =  168.00    " 

20      "       "        "    14X3.73        "  "         "       =    74.60    " 


FREDERIC    A.    PARKHURST 


175 


Total    447.42    " 
Total  standard  minutes  worked    =  447.42 
"      actual  "  "  =  540. 

447.42 

Man  efficiency  =  82.8 

540 
For  82.8%  efficiency  for  9  hours  in  Class  4  pays  $.690  Bonus. 

The  following  prices  will  be  paid  as  bonus  in  addition  to 
hourly  wages  based  on  the  working  efficiency  of  each  man  on  the 
job.  These  bonus  prices  will  not  be  lowered  no  matter  how  long 
the  job  may  run,  provided  the  equipment  and  method  specified  in 
this  chart  are  not  changed. 

Differential  per  1%  efficiency  =  $.018 

%  Efficiency  Bonus  Paid 

9  hrs.  9  hrs. 

80  .640 


81 
82 
83 
84 
85 
86 
87 
88 
89 
90 


.658 
.676 
.694 
.712 
.730 
.748 
.766 
.784 
.802 
.820 


%  Efficiency 

Bonus  Paid 

9  hrs. 

9  hrs. 

91 

.838 

92 

.856 

93 

.874 

94 

.892 

95 

.910 

96 

.928 

97 

.946 

98 

.964 

99 

.982 

100 

1.000 

As  another  example,  bonus  chart  9058D  issued  May  26,  1917, 
for  department  DIQ  is  reproduced  below.  This  chart  covers  the 
preparing  of  pitch  and  rosin  for  binders,  the  delivery  of  binders 
to  the  mixing  machines,  and  various  janitor's  duties  in  depart- 
ment IQ. 

BONUS  CHART  9058D,  MAY  26,  1917;  DEPT.  IQ, 

BONUS  CLASS  3 

Efficiency  Bonus  Chart  for  Preparing   Pitch  and 
Rosin  Binder,  Deliver  Binder  to  Mixing  Ma- 
chines AND  Various  Janitor  Duties 

Department  iO 

Bonus  paid  80%  efficiency. 

Standard  per  pound  rosin  and  pitch  prepared  for  mixing  ma- 
chines .14  man  minutes. 
Trip  to  IN  with  refuse  8  man  min. 
Trip  to  stock  room  for  supplies  5  man  min. 
Shovel  in  elevator  all  loose  sand  30  man  min. 
General  sweep  and  clean-up  of  entire  department  30  man  min. 


The  following  differential  bonus  will  be  paid  in  addition  to 
hourly  wages,  based  upon  the  number  of  pounds  of  pitch  and 
rosin  binder  delivered  to  sand  mixing  machine  and  also  upon  the 
efficiency  attained  in  the  performances  of  certain  other  duties  as 

specified  in  this  chart.  ,  .-      .  , 

The  following  instructions,  methods  and  specifications  must  be 

strictly  adhered  to: 

Duties  and  Standard  Time  Allowance  for  each : 

GROUP  No.  1 

1.  Breaking  open  barrel  of  rosin  or  pitch  in  yard. 

Using  a  pickax  the  iron  hoops  are  cut  in  two  and  then 
with  a  few  blows  the  barrel  will  fall  apart.  The  top,  bot- 
tom and  staves  of  each  barrel  must  be  cleaned  of  rosin  or 
pitch  by  scraping  with  the  edge  of  a  shovel.  The  staves, 
top  and  bottom  are  placed  in  a  pile  and  the  hoops  ar- 
ranged in  another  pile. 

2.  Delivery  of  Material 

The  barrel  staves,  tops  and  bottoms  are  loaded  on  a  wheel- 
barrow and  taken  to  wood  pile  in  yard.  It  is  possible  to 
load  the  wood  from  about  two  barrels  at  one  time.  The 
hoops  are  wheeled  to  box  in  yard  for  holding  rubbish. 
The  rosin  or  pitch  is  loaded  in  a  wheel-barrow  and  hauled 
to  IQ  where  it  is  placed  in  separate  bins  until  such  time 
as  used.  During  rainy  weather  the  barrels  must  be  in- 
doors when  opened.  , 
Standard  time  for  Group  No.  1  (operations  1  and  2)  .04«J 
man  min.  per  pound. 

GROUP  No.  2 

3.  Filling  pulverizing  mills  with  pitch  and  rosin. 

The  pitch  and  rosin  should  be  broken  into  small  lumps 
before  being  placed  in  the  mills.  Each  mill  should  be 
filled  to  its  capacity  and  refilled  as  soon  as  possible.  The 
mixtures  must  be  thoroughly  pulverized  and  must  be  free 
from  lumps  when  taken  from  the  mill. 
Standard  time  for  Group  No.  2  (operation  3)  .0557  man  mm. 

per  pound. 

^  GROUP  No.  3 

4.  Delivery  of  mixture  to  sand  mixing  machines. 

As  to  the  pitch  and  rosin,  it  is  pulverized  and  the  mixture 
taken  from  the  mill  and  shoveled  into  metal  tote  pans  or 
at  times  into  a  large  wooden  box  which  has  a  capacity  of 
six  tote  pans.  The  pans  or  boxes  are  weighed  and  then 
dragged  in  to  the  sand  mixing  machines.  It  is  important 
that  there  be  a  sufficient  supply  of  rosin  and  pitch  binder 
at  the  sand  mixing  machines  at  all  times. 
Standard  time  for  Group  No.  3  (operation  4)   .0360  man  min. 

per  pound.  ,,  ,        ,  , 

As  the  operations  in  Groups  1,  2  and  3  are  all  based  upon  the 
same  factor,— that  is,  the  pounds  of  mixture  produced,  they  can  be 
considered  as  one  unit.     So  the  total  of  the  standard  times  for 
Group  1   (1.  Breaking  open  barrel  of  rosin  or  pitch  .0403  man.  min. 

(2.  Delivery  of  material  .0080     "        " 

Group  2  (3.  Filling  mills  .0557 

Group  3  (4.  Delivery  of  binder  0360 

Total      .1400 


M 


^       "rA 


\k 


.11 


176 


DEPARTMENTAL    EFFICIENCY    BONUS 


GROUP  No.  4 


Miscellaneous  Operations : 

5.  The  refuse  which  comes  from  the  riddle  on  the  sand  mix- 
ing machine  is  to  be  wheeled  to  the  riddle  in  Dept.  IN. 
The  wheel-barrow  must  be  well  filled;  no  time  will  be 
allowed  unless  wheel-barrow  is  full. 

Standard  time  for  this  operation  is  8.00  minutes  per  trip. 

6.  Sometimes  it  is  necessary  for  a  man  to  be  sent  to  the  store 
room  for  supplies. 

Time  allowance  for  this  operation  5.00  minutes  per  trip. 

7.  Sand  falls  from  buckets  in  elevator  and  must  at  times  be 
shoveled  into  pit. 

Time  allowance  for  this  operation  30  minutes  per  day.  This 
work  should  be  done  as  often  as  it  is  necessary  in  order  to  keep 
floor  clean. 

8.  For  making  a  general  clean-up  of  the  entire  floor  of  IQ 
so  that  it  is  satisfactory  to  the  foreman,  an  allowance  of  30  minutes 
per  day  is  made. 

Equipment : 

1.  Metal  wheel-barrow,   common   foundry  type. 

2.  Short  spade. 

3.  Ordinary  pickax. 

4.  Hammer  for  breaking  lumps  of  rosin  and  pitch. 

5.  Four  pulverizing  mills. 

6.  Metal  tote  boxes;   average  capacity  sixty-two  pound   mixture. 

7.  Large  wooden  box;  capacity  equal  to  six  tote  boxes. 

8.  Broom. 

Method  of  Figuring  Bonus: 

The  bonus  will  be  figured  daily  from  a  standard  tally  sheet 
showing  the  total  pounds  of  rosin  and  pitch  binder  delivered  to 
the  sand  mixing  machines.  Time  allowance  is  made  for  each  load 
of  refuse  wheeled  to  IN  ;  for  each  trip  to  store  room  for  supplies, 
for  shoveling  sand  which  falls  from  elevator  into  pits,  and  for 
general  sweeping  up  of  the  floor  of  mixing  room,  including  pas- 
sageway as  far  as  2F  department. 

Suppose  thirty-one  hundred  pounds  of  binder  are  delivered  to 
mixing  machines. 

The  standard  time  per  pound  for  all  operations  covering 
the  preparation  of  the  binder  is  .14  man  minutes. 

3100  X  -14  =  434  standard  man  minutes. 

Also  four  wheel-barrow  loads  of  rubbish  were  hauled  to 
riddle  in  IN. 

4  X  8.00  =  32.00  standard  man  minutes. 

Sand  was  shoveled  into  elevator  pits  in  a  satisfactory  man- 
ner during  the  entire  day. 

Allowance  30  man  minutes. 

The  entire  floor  of  mixing  room  was  cleaned  in  manner 
satisfactory  to  the  foreman. 

Allowance  30  man  minutes. 

No  trips  made  to  store  room. 


FREDERIC    A.    PARKHURST 


Total  standard  man  minutes  for  all  operations — 


177 


1. 
2. 
3. 
4. 


Preparation  and  delivery  of  mixture 
Wheel  into  rubbish  heap 
Shovel  sand  into  elevator  pit 
General  sweep  up 


434. 
32.00 
30.00 
30.00 


Efficiency 


Total    526.00 
Man's  clock  card  showed  9  hours,  or  540 

Standard  minutes  526 

or =  97.5% 

Actual  minutes      540 


The  bonus  for  97.5%  efficiency  for  9  hrs.  in  Qass  3  =  $.717 
The   following  prices  paid  as  bonus  will  not  be  lowered,  no 
matter  how  long  the  job  may  operate,  provided  the  method  and 
equipment  specified  in  this  chart  are  not  changed. 
Differential  per  1%  efficiency  =  $.0135 


Efficiency 
9  hrs. 

80 

81 

82 

83 

84 

85 

86 

87 

88 

89 

90 


Bonus  Paid 
9  hrs. 

.480 

.494 
.507 
.521 
.534 
.548 
.561 
.575 
.588 
.602 
.615 


Efficiency 
9  hrs. 

91 
92 
93 
94 
95 
96 
97 
96 
99 
100 


Bonus  Paid 
9  hrs. 

.629 
.642 
.656 
.669 
.683 
.696 
.710 
.723 
.737 
.750 


There  are  many  more  similar  and  many  more  complex 
problems  which  have  to  be  solved  before  the  departmental 
efficiency  determinations  can  be  made. 

I  am  bringing-  in  unusual  applications  of  time  study  and 
differential  bonus  so  as  to  illustrate  the  point  that  depart- 
mental efficiency  does  not  always,  in  fact  very  seldom,  de- 
pend solely  on  the  average  efficiency  of  all  of  the  direct  jobs 
or  operations  which  may  themselves  be  under  bonus.  In 
machine  departments,  or  departments  working  with  purely 
mechanical  apparatus  and  with  material  that  can  be  con- 
trolled by  the  piece,  the  application,  of  departmental  effi- 
ciency bonus  is  very  simple.  In  the  foundries,  for  example, 
there  are  a  variety  of  elements  of  indirect  labor  which  in 
themselves  represent,  in  the  aggregate,  a  very  large  propor- 
tion of  the  man  hours  worked  in  the  plant.  These  must  be 
brought  under  control  by  a  scientific  analysis  and  some  equi- 
table scheme  of  bonus  developed  to  remunerate  these  men 


I 


178 


DEPARTMENTAL    EFFICIENCY    BONUS 


for  high  efficiency,  or  else  to  obtain  departmental  efficiency 
records,  we  should  have  to  exclude  a  tremendous  proportion 
of  the  hours.  This  has  been  done  in  some  plants  because 
it  has  been  considered  impracticable  or  far  from  economi- 
cal to  take  the  time  to  bring  these  elements  under  control. 

Department  DiQ  referred  to  above  was  under  observa- 
tion by  two  time  study  men  for  an  aggregate  time  for  them 
both,  totaling  nearly  four  months.  The  result  of  the  study, 
however,  enabled  us  to  put  all  of  the  labor  in  that  depart- 
ment on  bonus,  greatly  increasing  its  efficiency  and  effecting 
a  saving  in  a  short  time  equal  to  about  2000  hours  per  week, 
or  $600.00:  or  a  saving  of  about  $2500.00  per  month  based 
on  the  same  volume  of  business. 

After  all  of  the  various  classes  of  work  mentioned  above, 
and  all  of  the  direct  or  indirect  operations  or  jobs  have  been 
standardized  and  controlled  through  the  medium  of  bonus 
charts,  and  men  have  been  trained  to  work  in  accordance 
with  them,  a  department  report  is  issued  daily  by  the  tally 
and  time  clerks  to  the  time  study  department.  These  re- 
ports are  totaled  for  the  week  and  from  them  is  determined 
the  departmental  efficiencies. 

Based  on  such  records  as  the  foregoing,  it  is  possible  to 
institute  the  departmental  efficiency  bonus,  which  is  well 
illustrated  by  our  departmental  and  plant  efficiency  bonus 
chart  9030D,  copy  of  which  follows: 

DEPARTMENTAL  AND  PLANT  EFTICIENCY  BONUS 

CHART  9030D,  FAP  205 

Bonus  Covered  by  this  Chart  is  Payable  only  to 
Foremen  and  Department  Heads,  and  in  Ac- 
cordance WITH  Instruction  145. 

The  efficiency  bonus  will  be  figured  for  each  department  separately 
as  fast  as  bonus  in  each  department  will  permit  of  the  department 
reaching  an  efficiency  of  at  least  60%.  The  departmental  efficiency 
bonus  will  be  paid  every  week  based  on  each  department's  efficiency, 
irrespective  of  the  efficiency  of  other  departments. 

On  the  15th  of  every  month,  an  additional  bonus  will  be  paid, 
based  on  the  average  plant  efficiency  of  the  whole  plant. 


FREDERIC    A.    PARK  HURST 


179 


The  Bonus  will  be  figured  in  accordance  with  the  following  for- 
mula in  which : 


H 
h 
R 
K 


Hours  paid  for  in  each  department  or  plant. 

Hours  on  Bonus, 

Reciprocal  of  average  efficiency  of  all  jobs  on  bonus  X  100. 

Constant  (2) 


H 


=:  Department  or  plant  efficiency. 


h  X  R  +  K  (H-h) 

The  above  formula  is  the  same  for  both  departmental  and  Plant 
efficiency,  except  that  the  value  given  to  each  of  the  symbols  will  be 
the  department  values  in  one  case  and  the  plant  values  in  the  other. 

The  value  given  to  "H"  in  every  case  will  be  the  total  hours  paid 
for  as  shown  by  the  clock  time  cards  exclusive  of  certain  hours  rep- 
resented by  a  list  on  file  with  the  Local  Manager,  which  are  to  be  de- 
ducted when  figuring  each  department's  and  each  plant's  value  for  "H." 

Example  of  Bonus  Figured 

H  =  1242  hours 
h    ==  1011      " 
Average  efficiency  for  all  jobs  =  92% 
1  X  100 
R  =  =  1.088 


92 


Then 


1242 


1242 


1011  X  1.088  -\-  2  (1242-1011)        1561 
.795  X  100  =  79.5% 
79.50%  pays  15.77%  Salary 


=  .795 


IM 


Efficiency 

%  of  Salary  Paid 

Efficiency 

%  of  Salary  Paid 

100 

25.00 

79 

15.55 

99 

24.55 

78 

15.10 

98 

24.10 

77 

14.65 

97 

23.65 

76 

14.20 

96 

23.20 

75 

13.75 

95 

22.75 

74 

13.30 

94 

22.30 

73 

12.85 

93 

21.85 

72 

12.40 

92 

21.40 

71 

11.95 

91 

20.95 

70 

11.50 

90 

20.50 

€9 

11.05 

89 

20.05 

68 

10.60 

88 

19.60 

67 

10.15 

87 

19.15 

66 

9.70 

86 

18.70 

65 

9.25 

85 

18.25 

64 

8.80 

84 

17.80 

63 

8.35 

83 

17.35 

62 

7.90 

82 

16.90 

61 

7.45 

81 

16.45 

60 

7.00 

80 

16.00 

Differential  1%   Efficiency  Pay,  .45%   of   Salary. 
THE  ALUMINUM  CASTINGS  CO. 

January  1,  1917. 


i8o 


m. 


PLANT    EFFICIENCY    BONUS 


27-B.      Plant  Efficiency  Bonus 


The  determination  of  the  plant  efficiency  bonus  is  a  com- 
paratively simple  matter,  as  it  is  calculated  at  the  end  of 
each  month  from  a  summary  of  the  performance  of  each 
department  for  that  month.  The  departmental  summary  is 
made  up  from  weekly  departmental  records  mentioned  pre- 
viously in  this  lecture. 

The  departmental  efficiency  bonus  shown  above  is  paid 
every  payday  and  for  the  departmental  efficiency  for  the 
last  preceding  week.  The  plant  efficiency  bonus  is  paid  on 
the  15th  of  each  month  on  the  plant  efficiency  for  the  pre- 
ceding month. 

As  previously  stated,  the  determination  of  these  depart- 
mental and  plant  efficiencies  is  one  of  the  last  steps  to  be 
taken  in  connection  with  the  installation  of  scientific  meth- 
ods throughout  the  operating  departments  of  a  plant.  By 
the  time  the  departmental  and  plant  efficiency  bonuses  are 
in  operation  and  bonus  is  being  earned  under  the  schedule 
described  in  this  lecture,  substantially  everyone  in  the  organ- 
ization except  certain  office  employees,  is  participating  in 
some  kind  of  a  bonus.  Each  plant  and  each  department  in 
the  plant  works  in  accordance  with  a  list  authorized  from 
time  to  time,  naming  those  who  participate  in  either  the 
departmental  or  plant  efficiency  bonus,  or  both.  Likewise, 
there  is  a  standard  list  published  which  controls  the  number 
of  hours  which  can  be  subtracted  from  the  total  hours 
worked  in  each  department  or  plant  before  the  "H"  hours 
are  computed. 

The  following  table  is  a  typical  example  of  how  the  de- 
partmental efficiency  is  summarized  for  each  month.  The 
total  gives  the  plant  efficiency  on  which  to  base  the  plant 
efficiency  bonus. 


FREDERIC    A.    PARKHURST 


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LECTURE  XXVIII 

DEPARTMENTAL  AND  PLANT  EFFICIENCY  RECORDS 

The  following  describes  how  the  above  records  are  prepared  and 
the  use  that  is  made  of  them,  and  emphasizes  the  importance  of  con- 
trolling all  of  the  factors  involved  in  the  determination  of  depart- 
mental and  plant  efficiency  records. 

The  previous  lecture  described  some  of  the  detail  on  which 
departmental  and  plant  efficiency  bonus  records  are  based. 
These  records  must  be  prepared  from  the  actual  perform- 
ance daily  of  all  the  jobs  on  bonus  and  in  accordance  with 
the  formula  shown  on  bonus  chart  9030D. 

The  tabulated  summary  of  departmental  bonus  efficiencies 
is  made  up  from  the  daily  job  tally,  time  cards  and  bonus 
pay  slip  records.  These  records  are  all  checked  against  the 
clock  time  cards  and  the  bonus  production  reported  is 
checked  against  the  inspector's  report,  so  that  all  deductions 
due  to  defective  material  may  be  approved  before  passing  the 
bonus  slip  through  for  approval  and  payment. 

The  fact  must  not  be  lost  sight  of  that  the  proper  time- 
keeping on  individual  jobs  or  operations,  as  well  as  the 
tallying  of  the  production  of  each  job,  are  of  vital  import- 
ance. In  speaking  of  production,  it  is  understood  of  course 
to  mean  production  of  good  pieces  or  good  zcork  zvhich  pass 
all  the  inspection  required  in  accordance  with  the  drawings, 
specifications,  standards,  etc.,  as  they  may  be  established 
from  time  to  time  for  the  different  classes  of  work. 

As  the  installation  of  time  study  methods  progresses,  the 
requirements  for  time  keeping  and  job  tallying  increase,  as 
it  is  of  paramount  importance  that  the  performance  of  each 
department  be  checked  by  other  controlling  records  to  assure 
the  fact  that  bonus  being  paid  to  the  men  is  justly  earned. 
As  the  data  is  the  foundation  of  the  departmental  and  plant 

182 


i!  '^ 


FREDERIC    A.    PARKHURST 


183 


il 


efficiency  records,  it  is  of  course  vitally  important  to  have 
it  correct,  because  if  incorrect,  all  records  relating  to  the 
efficiencies  mentioned  will  also  be  incorrect. 

If  careful  control  and  auditing  of  the  work  of  the  ac- 
counting, time-keeping  and  job  tally  clerks  is  maintained, 
then  the  maximum  economy  will  result.  The  maintenance 
of  all  control  is  of  course  an  organization  requirement.  As 
these  records  deal  with  the  disbursement  of  large  sums  of 
money,  it  is  just  as  important  that  they  be  audited  and  cor- 
rectly handled,  as  it  is  to  follow  such  practice  with  account- 
ing or  book-keeping  methods,  in  the  control  of  cash  and 
other  accounts.  Failure  on  the  part  of  the  Comptroller's 
Department  to  maintain  through  audit  the  accurate  perfor- 
mance of  the  clerical  work  should  not  be  blamed  on  the 
method,  but  rather  on  the  execution.  This  is  of  vital  im- 
portance and  too  much  emphasis  cannot  be  placed  upon  it. 

The  time-keeping  and  shop  clerk  departments  are  of  such 
vital  importance  that  the  personnel  of  same  should  be  given 
unusual  attention.  In  other  words,  the  men  employed  in 
these  two  divisions  are  responsible  for  the  disbursement  of 
many  thousands  of  dollars  monthly  in  a  plant  of  consider- 
able size  and  they  should  be  chosen  on  qualifications  just  as 
rigid  as  any  required  for  a  Cashier  or  a  Playmaster.  The 
records  required  of  these  two  departments  and  which  are 
checked  against  the  standard  time  sheets  by  the  planning 
room  time  study  staff,  form  the  basis  of  pay  for  all  direct 
and  indirect  bonus  operations  and  the  final  determination, 
as  above  stated,  of  the  departmental  and  plant  efficiencies. 
From  these  efficiencies  the  department  heads  and  other  shop 
executives  receive  their  extra  remuneration.  Obviously,  the 
secret  lies  in  properly  maintaining  the  organization  lineup 
and  by  audit,  insuring  honest  and  satisfactory  perfonnance. 

As  a  record  of  the  control  to  be  exercised  in  connection 
with  the  work  of  the  tally  clerks,  a  reproduction  from  the 
following  bonus  chart,  9002D,  will  suffice  as  a  typical  ex- 
ample how  the  work  of  these  men  is  scheduled.    . 


t 


If: 


if 


184  DEPARTMENTAL   AND    PLANT    EFFICIENCY    RECORDS 

BONUS  CHART  9002D,  APRIL  12,  1917;  DEPT.  2U, 

BONUS  CLASS  2 

Efficiency  Bonus  Chart  Specifying  the  Duties  and 
Operations  of  the  Tally  Clerk  in 

Department  2U 

A  bonus  will  be  paid  daily  to  each  tally  clerk  in  the  2U  department 
when  he  has  correctly  and  completely  performed  the  following  opera- 
tions : 

1.  The  tally  clerk  is  required  to  list  on  a  tally  sheet,  FAP  115,  a 
correct  count  of  each  operation  performed  by  the  workmen  in 
2U  department.  He  also  is  required  to  list  on  the  tally  sheet, 
FAP  115,  in  the  spaces  provided,  the  number  of  the  man  who 
works  on  the  job,  the  work  number  of  the  job,  the  piece  symbol, 
and  the  operation  symbols. 

2.  It  will  be  the  duty  of  the  tally  clerk  to  notify  the  time  clerk, 
also  the  route  clerk,  as  to  each  job  that  is  working  without  the 
proper  work  ticket,  FAP  231,  at  the  machine  in  the  holder 
provided. 

3.  The  tally  clerk  will  keep  the  correct  bonus  chart  in  the  holder 
provided  at  the  machine  where  the  operator  is  working.  It  is 
also  required  that  the  tally  clerk  keep  the  idle  bonus  charts 
neatly  filed  and  to  see  that  new  charts  are  substituted  for  those 
that  are  torn  or  lost  and  that  his  file  of  charts  is  at  all  times 
complete  and  in  order. 

4.  The  tally  clerk  will  sec  that  a  lot  tag  is  on  each  pan,  box  or 
barrel  of  castings  in  the  shop,  showing  the  lot  number  of  the 
job,  the  piece  symbol  and  number  of  pieces  in  the  lot. 

5.  All  disputes  regarding  shortages  on  counts  are  to  be  referred 
to  the  route  clerk  and  shop  foreman  for  settlement. 

6.  Accuracy  in  work  and  courteous  manner  towards  all  workmen 
are  the  essential  requirements  for  every  tally  clerk  who  expects 
to  make  bonus  on  this  chart. 

The  following  penalties  and  percent  are  deducted  for  each  offense : 

1.  For  every  minute  late  in  the  morning,  1%  will  be  deducted 
from  the  standard  efficiency  of  100%  for  the  day. 

2.  For  tally  sheets  not  made  out  neatly  and  clearly,  5%  will  be 
deducted. 

3.  Wrong  tally  on  sheet,  5%  will  be  deducted. 

4.  Wrong  work  number  listed,  2%  will  be  deducted. 

5.  Wrong  piece  symbol  listed.  2%  will  be  deducted, 

6.  Wrong  operation  symbol  listed,  2%  will  be  deducted. 

7.  Wrong  man  number  listed,  2%  will  be  deducted. 

8.  The  absence  of  work  orders  at  machine,  2%  will  be  deducted 
for  each  work  order. 

9.  The  absence  of  bonus  chart  at  machines,  1%  will  be  deducted. 

10.  The  wrong  bonus  chart  at  machine,  2%   will  be  deducted. 

11.  Careless  filing  of  idle  charts,  5%  will  be  deducted. 

12.  Incomplete  file  of  charts,  5%  will  be  deducted. 


FREDERIC    A.    PARKHURST 


185 


13.  For  each  missing  lot  ticket  on  every  pan,  box  or  barrel  in  the 
shop,  1%  will  be  deducted. 

14.  Discourtesy  to  superiors  or  shop  workmen,  10%  will  be  de- 
ducted. 

15.  One  hour,  after  the  shop  closes  down,  will  be  allowed  to  take 
the  final  count.  For  every  minute  over  the  allowed  hour  that 
is  registered  on  the  clock  card,  1%  will  be  deducted. 

16.  Bonus  will  be  paid  on  a  basis  of  80%  efficiency,  Bonus  Class  2. 
Every  day  the  efficiency  is  below  80%,  it  will  count  one  de- 
merit. Five  demerits  in  succession  will  be  sufficient  cause  for 
discharge. 

17.  The  following  prices  will  be  paid  in  addition  to  hourly  wages 
based  on  the  daily  efficiency  of  each  tally  clerk.  These  prices 
will  not  be  lowered  but  the  time  study  chief  reserves  the  right 
to  cancel  this  chart  if  it  is  not  worked  exactly  to  specifications 
and  instructions. 

The  time  keeper  will  be  responsible  for  making  the  deduction  on 
items  1,  11,   12  and  15.     All   deductions  are  to  be   reported  daily  to 

route  clerk  in  written  form  and  he  is  to  file  this  copy  in  order  of  days. 
The  superintendent  and  shop  foremen  are  responsible  for  making 
deductions  on  items  8,  9,  10,  13  and  14.  The  production  clerk  and 
route  clerk  are  responsible  for  making  deductions  on  items  2,  3,  4,  5, 
6  and  7. 

The  tally  clerks  are  to  be  listed  on  a  daily  bonus  report  FAP  192 
and  hereafter  the  hours  worked  by  tally  clerks  will  not  be  deducted 
from  the  total  hours  worked  in  department  when  figuring  the  weekly 
departmental  efficiency  report. 


EFFICIENCY  BONUS  CHART  9002-D 

Differential  per 

1%  efficiency  =  $.009 

Tally  Clerk's 

Tally  Clerk's 

Efficiency  % 

Bonus  Paid 

Efficiency  % 

Bonus  Paid 

9  hrs. 

9  hrs. 

9  hrs. 

9  hrs. 

80 

.32 

91 

.419 

81 

.329 

92 

.429 

82 

.338 

93 

.437 

83 

.347 

94 

.446 

84 

.356 

95 

.455 

85 

.365 

95 

.464 

86 

.374 

97 

.473 

87 

.383 

96 

.482 

88 

.392 

99 

.491 

89 

.401 

100 

.500 

90 

.410 

As  previously  stated,  bonus  is  checked  and  figured  in  the 
time  study  department  by  bonus  clerks  who  do  nothing  but 
figure  and  check  bonus  pay  sHps  and  record  the  bonus  pay 
for  each  man.  At  the  end  of  the  week,  the  individual  bonus 
record  is  totaled,  balanced  and  reported  to  the  time  keeping 
department  and  a  check  made  and  filed  with  the  individual 
bonus  records  themselves. 


; 


Jj., 

I 


\v!r 


Figure   efficiency   only 

bonus 
Copy  bonus  slips 
Each  shortage 


186  DEPARTMENTAL   AND   PLANT    EFFICIENCY    RECORDS 

The  following  bonus  chart,  9054D,  will  best  describe 
how  the  work  of  the  bonus  clerks  is  brought  under  control 
and  how  their  work  is  checked. 

BONUS  CHART  9054-D,  MAY  7,  1917;  TIME  STUDY 
DEPARTMENT,  BONUS  CLASS  3 

Efficiency  Bonus  to  be  Paid  Bonus  Clerks  When 

Figuring  Bonus  and  Copying  Bonus  Slips  In 

Departments   1C-2C-3C-4C-1M-2M-3-M 

4M-5M-1T-2T-3T-1I-1W  and  2U 

Standards : 

.60  minutes 
.50 
.75 
3.00 
The  following  differential  bonus  will  be  paid  weekly  in  addi- 
tion to  salary  based  on  each  day's  efficiency  for  figuring  bonus  and 
copying  slips  when  a  standard  ten-inch  slide  rule  is  used  and  de- 
partmental bonus  reports  are  figured  on  FAP  192. 

The  daily  working  efficiency  of  the  operator  is  based  on  a 
standard  of  five  hundred  units  for  100%  efficiency  for  a  full  day's 
work.  Saturday,  half-day,  two  hundred  fifty  units.  Bonus  will 
be  paid  in  proportion  to  the  time  he  works  on  the  job.  One  unit 
equals  one  standard  minute  of  time.  When  the  operator  has  com- 
pleted enough  work  to  give  him  four  hundred  units,  he  is  figured 
80%  efficient.  If  it  is  possible  in  one  day  for  the  operator  to 
complete  enough  work  to  give  six  hundred  units,  he  is  to  be  paid 
bonus  at  the  rate  of  120%  efficient  in  Bonus  Class  3. 

Standard  Times : 

The  standard  for  figuring  the  efficiency  only  on  each  bonus 
operation  is  .60  minutes.  The  necessary  operations  for  the  bonus 
clerk  are  to  first  figure  the  standard  minutes  on  the  operation  by 
multiplying  the  standard  time  by  the  number  of  good  pieces  made 
by  the  workman.  Then  divide  the  standard  time  by  the  actual 
minutes  worked  and  the  result  is  the  operator's  working  efficiency. 
The  working  efficiency  is  to  be  inserted  with  pencil  on  FAP  192 
in  space  provided. 

The  standard  for  figuring  the  bonus  on  each  job  that  makes 
bonus  is  .50  minutes.  On  this  operation  the  bonus  clerk  is  to  use 
a  standard  efficiency  bonus  chart,  a  copy  of  which  is  enclosed  in 
this  chart.  This  gives  the  amount  of  bonus  paid  in  each  class  for 
all  efficiencies  from  70%  to  100%  for  9  hours.  Then  figuring  the 
bonus  for  less  than  9  hours  the  amount  of  bonus  paid  for  9  hours' 
work  is  divided  by  540  and  the  result  multiplied  by  the  actual  time 
the  workmen  operated  the  job. 

The  standard  for  copying  the  bonus  slips  is  .75  minutes.  This 
includes  filling  in  the  slips  complete.  It  is  to  be  noted  that  all 
figures  must  be  made  neatly  and  carefully  so  there  will  not  be  a 
misunderstanding  of  the  figures  when  the  slips  are  passed  on  for 
payment. 

The  standard  for  each  shortage  that  is  checked  and  accuracy 
guaranteed  by  the  bonus  clerk,  is  3  minutes.    However,  in  all  cases 


FREDERIC    A.    PARK  HURST 


187 


where  the  shortage  was  the  result  of  carelessness  or  any  fault  of 
the  bonus  clerk,  he  will  be  deducted  3  units  from  the  day's  total. 

Method  of  Tally : 

When  the  department  reports,  FAP  192,  are  received  and  dis- 
tributed, each  bonus  clerk  is  to  stamp  his  sheet  in  the  upper  left- 
hand  corner  of  the  top  sheet  with  a  stamp  provided. 

This  is  to  be  properly  filled  out  as  the  work  progresses  and 
when  the  complete  report  is  figured  the  record  is  posted  on  the 
following  form.  This  record  complete  is  to  be  signed  by  the 
operator  and  given  the  time  study  chief  at  the  completion  of  the 
day's  work  and  it  is  from  this  record  that  bonus  will  be  figured- 
Example  : 


Suppose  the  clerk  figures 

250  efficiencies 

190  bonus 
copies     190  slips 
Figures  and  checks                    4  shortages 
Then  250  x  .60  =   150  Standard  units 
200  X  .50  —  100 
200  X  .75  —  150 
4  X3.00  =     12 

Total        412 
412 
=   82.%   Ffficiencv  na 

vs  $.51    Bonus 

500 

EFFICIENCY  BONUS  CHART  9054-D 

Diflferential  per  1%  efficiency  =  $.0135 


%  Efficiency 

Bonus  Paid 

%  Efficiency 

Bonus  Paid 

9  hrs. 

9  hrs. 

9  hrs. 

9  hrs. 

80 

.480 

91 

.629 

81 

.494 

92 

.642 

82 

.507 

93 

.656 

83 

.521 

94 

.669 

84 

.534 

95 

.683 

85 

.548 

96 

.696 

86 

.561 

97 

.710 

87 

.575 

98 

.723 

88 

.588 

99 

.737 

89 

.602 

100 

.750 

90 

.615 

Time  will  not  permit  of  going  into  further  detail  as  to- 
how  various  reports  are  made  up  from  analysis  of  the  per- 
formance of  all  of  the  departments  except  to  repeat  again 
for  emphasis,  that  the  auditing  of  the  pay  in  the  form  of 
wages,  salary  and  bonus  must  be  in  the  control  of  com- 
petent men.  In  other  w^ords,  the  recapitulation  of  all  figures 
is  dependent  on  the  accuracy  obtained  at  the  source.  The 
management  must  realize  that  there  are  just  as  important 
economies  to  be  effected  and  maintained  in  the  indirect  di- 
visions of  the  business  as  there  are  in  the  direct.  Sprit 
d'Corps  is  of  vital  importance. 


'. 


^i     S: 


I?; 


lip 


I 


LECTURE  XXIX 

INSPECTION 
17.    Details  of  Inspection. 

This  lecture  will  discuss  modern  methods  of  inspection  and  has  been 
reprinted  complete  from  the  author's  "Scientific  Management  in  the 
Foundry,"  section  17. 

The  next  most  important  branch  of  the  organization  is 
Inspection.  Though  we  may  have  completely  developed 
and  under  control  our  oflfice  and  sales  departments,  a  prop- 
erly operating  Planning  Room,  routing  and  controlling 
orders,  material  and  labor,  and  a  well  maintained  plant, 
these  all  become  useless  without  the  continual  supervision 
of  the  inspection  department. 

Inspection  must  control,  to  the  smallest  detail,  all  of  the 
various  operations  from  the  first  inspection  of  the  design 
to  the  completion  and  shipment  of  the  last  piece  on  a  cus- 
tomer's order.  This  is  particularly  true  when  we  begin  to 
realize  intense  production  and  where,  in  addition  to  an 
hourly  rate,  we  pay  a  large  bonus  for  extra  production. 
Under  these  conditions  the  most  rigid  inspection  is  neces- 
sary. 

The  subject  of  inspection  will  be  discussed  in  order  of 
the  following  divisions: 

A — Designing  (281). 

B — Detailed  drawings  (285). 

C — Complete  pattern  equipment  (291). 

D — Sample  cores,  mold  and  casting  (294). 

E — Laboratory  control  of  mixtures  and  pouring  temperature  (299). 

F — Balance  of  labor  (302). 

G— Details  of  method  (303). 

H — Production  standards  based  on  time  study  (305). 

I — Routine  production  inspection,  including — (306). 

a — Pattern  equipment. 

b — Cores. 

c — Molds. 

d — Pouring  temperatures. 

e — First  inspection  of  casting — hot. 

f — Knockout  inspection. 

i88 


FREDERIC    A.    PARKHURST  iSq 

g — Trimming  inspection. 

h — General  inspection. 

i — Final  inspection. 

j — Service  inspection  (312). 

k — Inspection  Committee. 

Consideration  of  the  design  in  connection  with  a  cus- 
tomer's engineering  department  represents  the  first  touch 
of  inspection  pertaining  to  that  customer's  order.  It  is 
often  times  possible,  by  consultation  with  the  customer's 
engineer,  to  co-operate  toward  a  simplification  of  design  or 
change  of  sections,  or  a  combination  of  both.  Two  heads 
are  better  than  one. 

The  promotion  of  the  above  method  can  but  result  in 
eliminating  many  causes  for  loss  and  delay,  when  the  de-  . 
sign  in  the  form  of  a  pattern  finally  reaches  the  foundry. 

There  is  a  double  advantage  following  this  method  of 
preliminary  inspection  in  connection  with  a  foundry  that 
has  highly  developed  operating  methods.  Such  methods 
give  the  designing  engineer  access  to  a  great  deal  of  data 
covering  past  experiences  that  cannot  help  but  be  of  great 
advantage  to  him  in  connection  with  future  work. 

Of  course  the  foundry's  engineer  is  the  medium  through 
which  the  customer's  engineer  and  designers  get  their  bene- 
fit of  the  best  foundry  practice. 

A  more  critical  inspection  now  takes  place  when  the  de- 
tailed drawing  for  an  individual  piece  is  ready  for  the  pat- 
tern shop.  At  this  stage  we  have  to  consider  a  great  many 
different  things  that  we  but  superficially  touch  upon  when 
the  general  designing  inspection  (see  281  above)  was 
made. 

Before  proceeding  with  the  pattern  equipment  there  are 
a  great  many  things  to  consider.  These  different  items  in- 
clude, quanity  to  be  made  from  a  pattern,  foundry  method 
to  be  employed,  cost  of  the  pattern  equipment  for  various 
molds  where  a  choice  is  possible,  method  of  rigging  up,  gat- 
ing, flask  equipment,  etc. 

If  the  pattern  under  consideration  is  a  cored  job  we  have 
to  consider  the  style  and  arrangement  of  core  boxes.  This 
brings  us  down  to  a  minute  consideration  of  the  design 


190 


INSPECTION 


ih 


Mi 


:  W.\ 


and  proportions  of  the  pattern.  This  inspection  often  leads 
to  a  modification  in  design  or  proportion  overlooked  at  the 
time  of  the  first  inspection. 

When  considering  the  matter  of  equipment  the  members 
of  the  factory  board  are  often  represented  in  a  discussion 
as  to  these  details.  It  is  also  important  that  the  Superin- 
tendent, Time  Study  Foreman  and  Foundry  Foreman 
should  work  together  toward  a  settlement  of  these  prelim- 
inaries. 

Too  much  stress  cannot  be  laid  on  the  fact  that  pattern 
eciuipment  (excepting  perhaps  in  relation  to  large  produc- 
tion jobs)  does  not  as  a  rule  have  the  careful  attention  that 
it  should.  The  average  foundry  does  not  know  what  is 
the  best  combination  of  flask  dimensions  (based  on  scientific 
knowledge)  to  get  the  greatest  tonnage  from  a  given  pat- 
tern. This  statement  applies  to  jobs  which  may  be  run 
from  either  a  solid  or  split  pattern,  or  a  gated  pattern,  or  a 
plated  pattern.  In  other  words,  there  is  an  ideal  combina- 
tion for  every  job.  These  jobs  cannot  be  intelligently  and 
economically  planned,  and  pattern  equipment  cannot  be 
properly  made  without  the  accurate  standard  data  and  pro- 
duction knowledge  which  can  onJy  be  determined  by  scien- 
tific methods. 

On  bench  and  squeezer  work  we  have  also  to  consider 
those  jobs  which  require  matches.  The  design  of  the  match 
and  method  of  its  construction  have  a  very  material  efifect 
on  the  job  when  it  reaches  the  foundry. 

A  consideration  of  the  items  mentioned  above  in  para- 
graph 285  gives  us  the  full  knowledge  to  prepare  our  com- 
plete pattern  equipment.  This  pattern  equipment,  as  the 
term  is  used,  means  not  only  patterns  and  core  boxes  but 
core  dryers,  matches,  etc.  Where  the  flask  equipment  is 
special  and  the  patterns  cannot  be  adapted  to  standard  flasks 
and  boards,  then  this  equipment  should  also  be  considered 
as  part  of  the  pattern  equipment — likewise  machine  equip- 
ment. 

The  machine  equipment,  the  standard  and  often  used 
for  many  jobs,  represents  part  of  a  given  pattern  equip- 


FREDERIC    A.    PARKHURST 


191 


i 


ment,  provided  such  equipment  is  designed  to  run  on  that 
machine. 

At  all  stages  of  the  work  through  the  foundry  continual 
inspection  must  be  maintained  of  core  boxes,  dryers,  pat- 
tern equipment,  flasks  and  machines.  If  this  inspection  be- 
comes lax  we  may  continue  to  make  cores  which  the  molder 
has  to  file  a  bit  or  we  may  be  tied  up  for  production  due  to 
lack  of  a  certain  number  of  core  dryers.  In  other  words, 
there  is  much  more  to  the  subject  of  inspection  of  pattern 
equipment  than  merely  the  inspection  of  a  new^  pattern. 
This  inspection  must  be  continuous— patterns  must  come 
out  of  the  sand  at  night,  be  inspected  and  perhaps  "touched 
up"  before  production  starts  in  the  morning.  The  flasks 
must  be  watched  to  see  that  there  is  no  shift  in  the  pins- 
core  boxes  must  be  examined  periodically  to  see  that  loose 
pieces  do  not  "ram  off"  or  become  misplaced  due  to  wear 
or  distortion. 

Regular  shop  inspection  on  work  produced  first  takes 
place  at  the  time  sample  castings  are  made.  Here  we  have 
to  consider  the  inspection  of  cores,  mold  and  casting.  The 
cores  should  be  inspected  in  the  core  room  and  when  neces- 
sary gages  should  be  provided  to  assist  in  inspection  as  to 
size  and  shape.  When  making  sample  castings  it  is  well 
to  order  two  or  three  sets  of  cores.  This  method  will  ex- 
pedite making  of  samples  in  the  event  the  first  one  or  two 
castings  are  lost. 

The  inspection  of  the  mold  is  the  next  step.  This  inspec- 
tion should  take  place  before  the  mold  is  cored  up.  At  this 
point  we  have  to  consider  the  action  of  the  pattern  to  see 
that  it  draws  properly.  If  the  pattern  does  not  have  proper 
draft  or  if  there  something  wrong  with  the  rigging  we 
have  a  torn-up  mold.  This  should  be  corrected  at  once 
and  another  mold  tried  out  until  we  get  the  pattern  working 
in  satisfactory  shape.  When  we  have  a  perfect  mold  we 
are  then  ready  to  provide  a  necessary  gating,  after  which 
the  mold  is  ready  to  core  up. 

In  setting  cores  in  the  first  mold  every  core  should  be 
carefully  inspected  as  to  size  and  fit.     The  "setting"  must 


192 


INSPECTION 


w 


S' 


I 


'■  t'. 


be  inspected  to  see  that  the  core  prints  and  cores  match 
properly — that  the  core  settles  into  position  and  that  we 
have  a  proper  thickness  of  metal  as  per  the  blue  print.  A 
detail  blue  print  of  the  piece  in  question  should  be  on  the 
floor  at  the  time  the  sample  casting  is  made.  This  is  par- 
ticularly important  where  the  job  is  a  large  floor  job  or  a 
complicated  piece. 

Based  on  past  experience  by  consulting  records  of  pour- 
ing temperatures  of  similar  castings  the  correct  pouring 
temperature  for  the  first  casting  will  be  determined.  After 
the  mold  is  poured  and  dumped  out  an  inspection  of  the 
casting  will  indicate  as  to  whether  the  mold  was  poured 
at  the  correct  temperature  or  not.  Of  course,  this  may  not 
become  definitely  known  until  after  the  cores  are  knocked 
out  and  the  casting  chipped.  In  any  event  the  first  one  or 
two  castings  poured  will  allow  us  to  determine  the  correct 
pouring  temperature.  When  this  has  once  been  determined 
all  of  the  subsequent  castings  will  be  poured  at  that  tem- 
perature, within  an  allowable  variation  of  a  few  degrees. 
(See  Fig.  17.) 

The  sample  as  soon  as  poured  should  be  "knocked  out" 
passed  through  the  trimming  and  inspection  departments 
(see  Figs.  18  and  19)  and  checked  by  the  Chief  Inspector 
to  see  that  it  agrees  Avith  the  drawing.  After  this  has  been 
done  it  is  ready  for  delivery  to  the  customer  provided  it  is 
passed  in  quality,  workmanship  and  size  by  the  Chief  In- 
spector. All  sample  castings  are  marked  with  a  tag  and  di- 
rected to  the  attention  of  the  party  at  the  customer's  plant 
who  is  to  give  it  the  first  inspection  and  O.  K.  A  written 
approval  of  the  sample  casting  is  required  before  the  foun- 
dry proceeds  with  production. 

Prior  to  the  pouring  of  the  casting  as  described  in  294, 
laboratory  control  exerts  its  influence.  In  other  words, 
the  mixture  is  determined  and  the  laboratory  control  of 
melting  and  pouring  assures  the  best  practical  results  in 
the  pouring  of  the  casting  itself. 

All  molds  are  poured  by  a  specially  trained  gang.  The 
pouring  gang  as  well  as  the  furnace  men  and  melters  are 


FREDERIC    A.    PARKHURST 


193 


under  the  general  supervision  of  the  Chief  Chemist  in  so 
far  as  the  technical  part  of  their  work  is  concerned.  By 
this  method  we  eliminate  labor  and  delays  caused  by  the 
molder  pouring  his  molds  himself.  We  are  also  able  to 
restrict  the  responsibility  for  a  proper  melting  temperature 
and  pouring  to  technically  trained  men  rather  than  to  the 
average  run  of  untrained  mechanics.     (See  Fig.  17.) 

Laboratory  control  as  above  described  in  itself  repre- 
sents another  very  important  form  of  inspection.  In  other 
words,  through  laboratory  control  we  have  a  study  of  alloys 
and  inspection  of  mixture  and  pouring  temperatures. 

The  balance  of  labor  is  pre-determined  by  our  Time 
Study  Foreman  and  our  standard  production  data.  When 
production  is  realized,  based  on  given  equipment,  and  a 
check  on  the  quality  of  the  work  turned  out,  it  gives  us  a 
continual  check  on  our  labor.  The  "man  days"  worked  on 
a  given  production  at  a  prevailing  average  rate  per  man 
day  for  different  classes  of  labor,  checked  against  our  cost 
control  chart  gives  us  the  equivalent  of  an  inspection  con- 
trol on  all  labor  expended. 

In  addition  to  the  general  labor  control,  as  explained 
above  in  302,  we  have  the  detail  inspection  of  method.  This 
inspection  of  method  consists  of  the  detailed  time  study 
into  the  motions  and  times  of  operations.  All  standard- 
ized operations  are  made  up  of  sub-operations  or  elemental 
sub-operations.  The  elemental  sub-operations  have  been 
standardized  and  standard  times  determined  for  them. 
These  determinations  provide  for  certain  combinations  to 
meet  any  of  our  standard  methods. 

The  inspection  of  equipment  and  the  determination  of  the 
method  combined  with  our  standard  production  data  gives 
us  a  perpetual  control  and  inspection  of  these  methods  while 
each  job  is  in  process. 

After  determining  the  balance  of  labor  in  the  detailed 
method  described  above  in  302  and  303,  the  time  study 
foreman  issues  the  necessary  instructions  and  Bonus  Charts 
to  cover  the  details  of  the  job  in  process.  As  mentioned 
in  303  our  standard  data  give  us  the  basis  for  all  of  this 


194 


INSPECTION 


information,  though  certain  individual  time  studies  may 
be  necessary  to  take  care  of  any  specal  features  peculiar  to 
that  job.  This  time  study  work  includes  the  time  study 
necessary  to  put  on  bonus  core  making  (each  individual 
box  is  figured  separately)  molding,  knocking  out,  trimming 
and  inspection  and  any  other  operations  involved  in  the 
process. 

In  paragraphs  281  to  305,  inclusive,  we  have  discussed 
the  various  divisions  of  work  necessary  to  get  a  foundry 
job  in  condition  to  run.  After  the  submission  of  the  sam- 
ple and  a  written  O.  K.  from  the  customer  we  are  then  pre- 
pared to  run  the  job  on  a  production  basis.  The  routine 
inspection  of  the  job  while  it  is  in  process  for  production 
is  very  similar  to  that  outlined  above.  In  other  words,  to 
sum  up  the  above  we  have  during  production  the  following 
stages  of  production,  viz. — 

Inspection  of — a — Pattern  equipment, 
b— Cores, 
c — Molds. 

d — Pouring  temperature  and  laboratory  control, 
e — First  inspection — hot  casting, 
f — Knockout  inspection. 
g — Trimming  room  inspection, 
h — General  inspection, 
i — Final  inspection. 

Applying  to  certain  of  the  above  stages  of  inspection  we 
must,  of  course,  have  drawings,  gages  or  other  standards 
to  which  inspection  shall  be  made.  The  use  of  gages  is  de- 
sirable in  both  core  and  molding  rooms.  They  are  also 
equally  desirable  in  many  cases  in  the  trimming  and  final 
inspection  rooms,  although  the  entire  field  under  discussion 
is  considering  only  rough  castings,  not  machining  opera- 
tions. 

As  stated  at  the  commencement  of  this  section  on  in- 
spection it  is  absolutely  necessary  that  the  various  stages 
of  the  work  in  process  shall  have  careful  inspection  along 
the  lines  indicated  above.  There  can  be  no  economv  in  a 
delayed  core  inspection  with  the  resultant  loss  of  a  lot  of 
cores;  nor  a  delay  in  the  first  "knockout''  inspection  when 
the  casting  is  hot.    The  foundry  is  liable  to  run  ahead  with 


FREDERIC    A.    PARKHURST 


195 


a  large  production  before  the  defect  becomes  known.  Often 
defects  will  be  discovered  after  the  casting  has  reached  the 
trimming  table.  Oftentimes  there  will  be  a  strain  in  the 
casting  which,  though  not  sufficient  to  break  it  at  once,  will 
cause  it  to  fracture  under  the  ordinary  vibration  it  gets  in 
knocking  out  cores  and  during  the  process  of  trimming. 
Here  we  have  a  defect,  the  discovery  of  which  was  de- 
layed. 

Prompt  action  is  necessary  to  report  all  defects  back  to 
the  molding  room  or  the  laboratory,  as  the  case  may  be. 
Sometimes  a  slight  difference  in  the  run  of  metal  will  cause 
a  crack  and  it  is  up  to  the  laboratory  to  immediately  run 
down  this  trouble. 

We  must  realize  the  necessity  for  continuous  control  of 
operations,  particularly  where  the  men  are  working  at  high 
speed  and  are  making  large  bonuses.  When  men  have  been 
trained  to  do  their  work  with  a  minimum  of  motion  and 
exertion,  keeping  their  minds  and  hands  continually  on 
the  job,  with  proper  inspection  control  the  required  produc- 
tion can  be  realized  with  an  A-i  quality.  This  statement 
is  not  based  on  any  theoretical  proposition  but  on  absolute 
facts  and  experience  of  years.  The  writer  has  one  large 
foundry  in  mind  where  his  methods  tripled  the  production 
and  reduced  the  defective  loss  60  per  cent. 

We  now  come  to  the  last  word  of  inspection  service,  viz. 
— the  Service  Inspector.  The  success  of  service  inspection 
depends  primarily  on  two  things — one  the  inspector  him- 
self, the  other  the  plant  behind  him.  The  Service  In- 
spector while  primarily  a  shop  man  by  training  and  experi- 
ence, should  be  a  member  of  Sales  Department  when  the 
ultimate  scheme  of  organization  is  complete. 

It  shall  be  the  Service  Inspector's  duty  to  keep  in  touch 
with  all  of  the  customers,  particularly  the  larger  ones,  so  as 
to  learn  as  early  as  possible  all  of  their  complaints.  He 
must  of  course  keep  in  touch  with  the  foundry  during  his 
daily  trips.  This  is  particularly  true  where  continuous 
pouring  is  the  practice  and  the  foundry  is  run  solely  as  a 
jobbing  business. 


-mmt^mm 


ig6 


INSPECTION    COMMITTEE 


If  the  Service  Inspector  is  a  practical  man  he  can  go  into 
the  customer's  plant  and  co-operate  with  the  customer's  in- 
spectors and  mechanics.  His  service  will  prove  to  be  one 
that  is  mutually  beneficial.  It  is  only  too  true  that  com- 
plaints based  on  some  small  minor  trouble  or  defect  often 
reach  "those  higher  up,"  which  if  given  prompt  attention 
in  the  first  place  by  the  foundry  would  never  have  developed 
into  a  complaint  at  all. 

The  more  thorough  knowledge  a  foundry  has  through 
its  service  inspector  of  the  requirements  of  the  customer, 
the  accuracy  he  requires,  the  better  the  service.  Service 
Inspection  is  necessary  too  so  that  the  foundry  can  tell  just 
what  part  of  the  work  must  have  particular  attention  and 
be  held  to  close  limits  and  what  part  will  stand  a  greater 
allowance  of  variation. 

The  writer  believes  that  the  average  reader  will  agree 
with  him  when  he  states  there  is  too  little  harmonv  between 
the  average  foundry  and  the  average  machine  shop.  Each 
thinks  the  other  is  wrong.  It  is  undoubtedly  true  however 
that  the  foundry  and  machine  shop  heads  are  oftentimes 
not  sufficiently  familiar  with  each  other's  trades  to  allow 
them  to  work  together  to  the  best  advantage.  Where  this 
condition  obtains  the  service  inspector,  though  perhaps  in 
an  unenviable  position,  has  the  opportunity  to  make  himself 
doubly  valuable.  The  advantage  of  such  a  service  is  obvi- 
ous if  the  right  man  is  chosen  for  this  most  important  posi- 
tion. 

The  purpose  of  the  inspection  committee  can  best  be  de- 
scribed by  referring  to  the  copy  of  complete  instruction 
below: 

Inspection  Committee,  Instruction  LXXX 

To  get  the  best  results  from  our  Shop  and  Service  In- 
spection Department,  it  is  desirable  that  the  general  scheme 
of  inspection  be  handled  along  the  following  lines.  This 
instruction  is  written  to  govern  the  general  handling  of  in- 
spection methods  entirely  separate  from  the  instructions 
applying  to  regular  inspection. 


FREDERIC    A.    PARK  HURST 


197 


Superintendent,   Chief   Inspector   and   Service   Inspector 
will  be  governed  by  the  following: 

a — Standards  will  be  established  from  time  to  time  on  various 
work ;  these  will  include  either  drawings,  references,  written  data  or 
gages,  as  the  case  may  be.  These  standards  are  to  be  determined  and 
mutually  agreed  upon  between  ourselves  and  our  customers.  Cus- 
tomer's requirements,  of  course,  must  be  consistent  with  best  foundry 
practice  and  the  commercial  production  of  their  product. 

b — Our  product  is  to  be  produced  in  accordance  with  the  above 
mentioned  standards  applying  to  each  specific  piece.  These  standards 
arc  to  be  adhered  to,  it  being  understood  that  we  have  already,  as 
specified  in  Paragraph  386  accepted  them  and  agreed  to  work  in  ac- 
cordance with  the  same. 

c — In  case  of  an  unusual  condition  or  a  question  as  to  the  in- 
terpretation as  to  what  standard  has  been  established,  or  in  case  of 
a  question  as  to  whether  a  piece  actually  meets  with  the  standard  or 
not,  such  case  shall  be  referred  to  the  Inspection  Committee.  This 
Inspection  Committee  is  to  consist  of  the  Service  Inspector,  who,  on 
account  of  his  duties,  will  be  thoroughly  familiar  with  the  customer's 
requirements;  the  Superintendent,  who  is  the  man  responsible  for  the 
product;  and  the  Chief  Inspector,  who  is  the  man  being  directly  re- 
sponsible for  the  shop  inspection. 

d— The  Chief  Inspector's  work  is  to  be  final  on  all  matters  of 
inspection,  except  in  cases  above  referred  to.  No  such  case  shall  be 
settled  definitely  by  either  the  Superintendent  or  the  Service  Inspector, 
but  milst  always  be  settled  in  accordance  with  the  majority  vote  with 
the  three  being  present.  In  other  words,  our  Chief  Inspector  is  to  be 
upheld  in  his  decisions  and  ordinary  routine  inspection  is  not  to  be 
passed  up  to  the  Inspection  Committee  for  settlement. 

The  method  described  above  is  to  further  the  mutual 
interests  of  our  customers  and  ourselves.  The  three  men 
representing  the  Inspection  Committee  are  the  ones  chiefly 
involved  in  the  matter  of  quality.  Their  close  co-operation 
will  eventually  result  in  keeping  our  standard  of  quality  at 
the  highest  possible  mark. 

The  General  Superintendent  may  be  called  in,  in  an  ex- 
officio  capacity,  on  matters  which  the  majority  of  the  In- 
spection Committee  desire  to  have  him  j^ersonally  investi- 
gate. 


i 


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If 


5  "5 1 


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i 


LECTURE  XXX 

RESULTS    OBTAINED    THROUGH    THE    CORRECT    APPLICATION 
OF  THE  SCIENCE  OF  MANAGEMENT 

30- A.    Effect  on  Production    and    Quality. 

30-B.    Effect  on  Costs. 

30-C.     Individual  and  Corporate  EFF^:cT. 

This  lecture,  covering  the  above  subjects,  has  been  printed  from 
the  manuscript  of  the  author's  "Scientific  Time  Study  and  DitTercntial 
Bonus"  novsr  in  course  of  preparation. 

30-A.     Effect  on  Production  and  Quality 

Before  the  Science  of  Management  became  more  gen- 
erally understood  and  before  there  were  verv  manv  widely 

m  y  m^ 

separated  examples  of  its  performance,  it  was  argued  that 
the  intense  production  claimed  would  result  in  a  greatly 
inferior  quality  of  product.  Likewise  the  reports  of  greatly 
increased  production  were  heralded  as  applying  only  to  a 
few  specific  and  unusual  cases.  Such  reports  were  often 
discredited  as  being  impossible  of  accomplishment. 

Today,  however,  the  wide  field  that  has  been  touched  in 
the  application  of  the  methods  of  Scientific  Management  has 
enabled  its  exponents  to  cite  so  many  cases  of  greatly  in- 
creased production  and  improved  quality,  that  a  much  more 
general  and  favorable  interest  in  the  new  management  has 
resulted.  It  is  not  unusual  to  find  production  increases 
running  as  high  as  looo  or  1200  per  cent  over  the  produc- 
tion formerly  realized  before  scientific  analysis,  time  study 
and  the  application  of  extra  remuneration  had  been  adopted. 

The  extreme  increases  referred  to  have  been  realized  in 
connection  with  specific  operations.  Some  of  these  opera- 
tions have  been  operations  performed  purely  by  manual  la- 
bor. Others  have  been  machine  operations.  Of  times  these 
results  have  been  made  possible  not  so  much  through  in- 
creased effort  on  the  part  of  the  workman,  as  through  the 
cumulative  effect   of  mrniy   ihiiigs.     The  dilTcrcnt    factors 

198 


FREDERIC    A.    PARKliURST 


199 


bearing  on  these  increased  productions  can  be  traced  back 
to  the  proper  analysis  and  routing  of  an  order,  the  prompt 
supplying  of  requisite  material,  the  careful  predetermina- 
tion of  the  method,  tools  and  equipment  to  be  used  in  con- 
nection with  turning  out  the  work,  and  careful  inspection 
and  supervision  during  the  processing  of  the  work.  On  the 
other  hand,  many  large  increases  have  been  shown  where 
the  elimination  of  false  moves  due  to  definite  instructions, 
and  an  incentive  to  work  to  them  have  awakened  the  work- 
man to  a  full  realization  of  what  it  is  possible  for  him  to 
accomplish  when  he  centers  his  mind  on  the  fulfillment  of 
a  task. 

The  foregoing  lectures  have  emphasized  the  importance 
of  control  and  inspection,  including  the  operation  inspection 
at  various  stages  during  the  processing  of  work.  Inspection 
is  just  as  important  an  item  of  control  as  are  the  analyses 
of  the  various  elements  entering  into  all  of  the  steps  neces- 
sary in  performing  any  given  piece  of  work. 

The  true  results  must  be  measured  by  average  perform- 
ance of  departments  or  plants.  From  results  within  the 
author's  own  experience  can  be  cited  cases  in  which  the  pro- 
duction increase  on  bonus  operations  was  80%  where  piece 
work  set  by  the  guess-work  method  was  supplanted  by  his 
additional  bonus  based  on  time  study.  Another  plant  has 
shown  a  production  increase  of  130% ;  another,  206%  ;  and 
still  another,  240%. 

The  formula  for  the  department  and  plant  ef^ciencies, 
which  formula  has  been  described  in  one  of  the  foregoing 
lectures,  is  based  on  certain  plant  conditions  giving  day  work 
a  value  of  only  50%  efficiency.  This  is  a  fair  representative 
figure  for  certain  conditions.  On  the  other  hand,  the  value 
of  the  constant  may  vary  depending  on  the  conditions  of 
the  plant  in  which  the  formula  is  being  applied. 

After  standardized  conditions  have  been  established  and 
an  accurate  record  of  the  performance  of  many  hundreds  of 
jobs  is  obtainable,  the  wide  discrepancy  in  the  production 
increases,  ranging  from  zero  on  some  operations  to  hun- 


j(x:) 


KFFKLT    ON    COSTS 


M 


(Ireds  of  per  cent  on  other  operations,  simply  emphasizes  the 
lack  of  uniformity  and  control  under  ordinary  management 
methods. 

The  effect  of  this  increased  production,  if  obtained 
through  proper  application  of  the  Science  of  Management 
methods,  will  tend  to  reduce  the  loss  from  defective  work. 
The  common  great  loss  due  to  defective  material  will  be 
minimized,  if  not  eliminated,  by  the  inspection  re(|uirements 
in  regard  to  material  before  processing.  The  writer  can  cite 
cases  of  defective  losses  reduced  60%,  and  in  one  instance, 
the  defective  or  rejected  material  returned  from  customers 
was  reduced  at  least  that  amount  in  just  one  of  its  several 
plants.  The  reduction  of  rejections  of  this  kind  has  an  ap- 
preciable bearing  on  the  service  a  firm  is  able  to  give  its  cus- 
tomers. The  increased  satisfaction  on  the  part  of  customers 
due  to  more  reliable  product  is  in  itself  an  incalculable  item. 
Reliability  of  service  is  often  the  greatest  asset  a  firm  can 
have.  It  often  expresses  the  difference  between  a  growing 
business  and  one  that  is  on  the  decline  from  lack  of  control, 
uniformity  and  reliability  of  product. 

30-B.     ££Fe€t  on  CosU 

The  direct  labor  cost  reduction  in  the  cases  mentioned 
above  ranged  all  the  way  from  30%  to  60%  and  in  the  case 
of  the  shop,  formerly  under  piece  work,  the  labor  cost  re- 
duction was  about  35%. 

These  reductions  in  cost  do  not  take  into  consideration 
the  added  saving  due  to  a  reduction  in  overhead  distributed 
to  work,  which  in  many  cases  is  an  important  item.  Of 
course  the  indirect  labor  costs  to  a  company  operating  under 
the  Science  of  Management  are  greater  than  one  operating 
under  the  old  form  of  management.  On  the  other  hand, 
the  greatly  increased  production  and  the  greatly  decreased 
cost  gives  a  net  result  in  cost  saving,  sometimes  running  as 
high  as  30  or  40  per  cent. 

Speaking  of  reduced  cost  of  operation,  the  fact  must  not 
be  lost  sight  of  that  there  is  another  saving  that  accrues  to 
the  added  profit  of  a  given  plant  or  department  from  its 


FREDERIC    A.    PARK  HURST 


201 


ability  to  turn  out  a  greatly  increased  quantity  of  product. 
Coupling  the  increased  volume  with  the  greatly  reduced 
total  cost  per  unit,  one  has  in  the  aggregate,  a  net  return  far 
in  excess  of  anything  realized  before,  in  the  majority  of 


cases. 


30-C.     Individual  and  Corporate  Effect 


One  of  the  best  illustrations  .of  the  result  of  Scientific 
Management  from  the  company's  viewpoint  is  that  given 
in  the  appendix  of  the  text  under  the  title  ''Six  Years  After" 
on  page  321.  A  discussion  of  the  performance  of  the  Fer- 
racute  Machine  Company  for  six  years'  operation  under  the 
author's  methods  and  after  he  left  them,  will  conclude  this 
course  of  lectures. 

Since  the  chapter  **Six  Years  After"  was  printed  (now- 
over  a  year  ago)  the  Company  has  been  able  to  further  in- 
crease its  special  bonus  to  its  w^orkmen  so  that  now^  they 
are  receiving  not  only  an  increased  wage  per  hour,  but  also 
a  quarterly  service  bonus  amounting  to  25%  of  the  wages 
paid  each  man  for  each  quarter.  A  copy  of  the  service 
bonus  chart  is  printed  below^ 

Service  Bonus  Chart,  FAP  61 -A 

The  satisfied  staff  of  workmen  and  the  continued  satis- 
factory results  obtained  by  this  Company  has  proved  the 
reliability  of  this  form  of  management  when  properly  in- 
stalled. Similar  work  in  other  plants  in  other  lines  of  busi- 
ness has  proved  the  answer  in  an  equally  satisfactory  man- 
ner. The  student  of  the  Science  of  Management  is  urged 
to  make  personal  investigations  himself  and  see  the  methods 
in  operation. 

SERVICE  BONUS  CHART  FAP  61 -A 

CopyriKht   1917  by   Frederic  A.    Parkhurst,  Organizing   Engineer. 

Employees  who  are  regular  in  their  attendance  are  of 
more  worth  to  the  Company  than  those  who  are  absent  any 
appreciable  amount  of  time.  This.  BONUS  CHART  is 
therefore  issued  to  give  extra  remuneration  in  the  fonn  of 


HI 


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m 


i\ 


V  ;1 


■1  *' 


202 


SERVICE    IJONUS 


SERVICE  BONUS  to  those  employees  who  do  not  absent 
themselves  from  work  on  an  average  of  more  than  three 
clays  for  any  three  consecutive  months,  without  permission 
in  writing  by  the  Company,  and  subject  to  the  following 
conditions : 

(a)  This  bonus  chart  applies  only  to  those  employees  who  have 
executed  an  Employment  Agreement,   FAP  60A, 

(b)  SERVICE  BONUS  will  be  paid  only  for  "continuous  service' 
for  periods  of  three  months  each.  The  term  "continuous  service" 
shall  apply  for  each  employee  from  the  time  he  executes  an  Employ- 
ment Agreement,  FAP  6()A,  and  so  long  as  such  continuity  of  service 
has  not  been  interrupted  by  absence  from  work  of  more  than  three 
days  for  any  three  consecutive  months  thereafter.  If  an  employee 
absents  himself  from  work  for  a  total  of  more  than  three  days  for 
any  such  three  month  period,  his  record  for  "continuous  service"  will 
have  been  broken  and  he  must  make  a  new  start  on  the  date  of  his 
return  to  work. 

(c)  The  continuity  of  service  mentioned  above  in  (b)  will  not  be 
considered  as  broken  if  an  employee  is  absent  from  work  more  than 
three  days  in  any  one  three-month  period  with  written  permission  or 
due  to  sickness  or  accident,  provided  such  absence  is  supported  by  a 
certificate  duly  signed  by  a  reputable  doctor  or  surgeon,  if  required 
by  company.  The  following  SERVICE  BONUS  is  based  on  normal 
hours  of  work  of  fifty-five  hours  per  week.  If  business  conditions 
require  putting  the  employee  on  less  than  the  fifty-five  hour  per  week 
schedule,  a  pro  rata  service  bonus  will  be  paid  uncfer  the  conditions 
stated  in  this  bonus  chart. 

(d)  If  an  employee's  hourly  wage  rate  is  changed  during  any 
quarterly  period,  his  bonus  for  that  quarter  will  be  computed  for  the 
wage  rate  he  was  getting  at  the  commencement  of  that  quarter,  and  his 
service  bonus  for  the  succeeding  quarter  will  be  based  on  his  new 
wage  rate. 

(e)  Employees  who  execute  one  of  our  Employment  Agreements. 
FAP  60A  on  or  before  December  31.  1917.  will  participate  in  Service 
Bonus  as  per  the  Schedule  given  below  in  Column  2,  commencing  as 
of  the  date  given  below. 

(f)  Employees  entering  our  employ  on  or  after  January  1,  1918, 
or  who  elect  to  execute  an  Employment  Agreement,  FAP  60A,  on  or 
after  January  1,  1918,  will  participate  in  Service  Bonus  shown  below 
in  Column  1  until  they  have  completed  one  year  of ,  continuous  em- 
ployment, after  which  they  will  automatically  change  to  the  participa- 
tion of  Service  Bonus  in  Column  2. 

(g)  If  an  employee  leaves  our  employ  before  the  end  of  any  three 
month  period,  he  will  not  receive  SERVICE  BONUS  for  that  period. 

(h)  All  earned  SERVICE  BONUS  payments  will  be  made  con- 
currently with  the  wage  payment  to  the  employee  on  the  payday  next 
following  the  completion  by  the  employee  of  a  "continuous  service'' 
period. 


• 

FREDERIC    A.    PARK  HURST 

203 

TABLE    TO    EXPLAIN 

COMPUTATION    OF    SERVICE 

BONUS 

■■ 

Column  1 

Column  2 

For  First  Year  of 

After  First  Year  of 

Continuous 

Service 

Continuous  Service 

Hourly 

Total  First 

Total  Second 

Rate 

Each  Quarter 

Year  Bonus 

Each  Quarter 

Year  Bonus 

$  .10 

$  13.75 

$  55.00 

$  17.18 

$  68.75 

.11 

15.12 

60.50 

18.90 

75.62 

.12 

16.50 

66.00 

20.62 

82.50 

.13 

17.87 

71.50 

22.34 

89.37 

.14 

19.25 

77.00 

24.06 

96.25 

.15 

20.62 

82.50 

25.78 

103.12 

.16 

22.00 

88.00 

27.50 

110.00 

.17 

23.37 

93.50 

29.21 

116.87 

.18 

24.75 

99.00 

30.93 

123.75 

.19 

26.12 

104.50 

32.65 

130.62 

.20 

27.50 

110.00 

34.37 

137.50 

.21 

28.87 

115.50 

36.09 

144.37 

.22 

30.25 

121.00 

37.81 

151.25 

.23 

31.62 

126.50 

39.53 

158.12 

.24 

33.00 

132.00 

41.25 

165.00 

■      .25 

34.37 

137.50 

42.96 

171.87 

.26 

35.75 

143.00 

44.68 

178.75 

.27 

37.12 

148.50 

46.40 

185.62 

.28 

38.50 

154.00 

48.12 

192.50 

.29 

39.87 

159.50 

49.84 

199.37 

.30 

41.25 

165.00 

51.56 

206.25 

.31 

42.62 

170.50 

53.28 

213.12 

.32 

44.00 

176.00 

55.00 

220.00 

.35 

45.37 

181.50 

56.71 

226.87 

.34 

46.75 

187.00 

58.43 

233.75 

.35 

48.12 

192.50 

60.15 

240.62 

.36 

49.50 

198.00 

61.87 

247.50 

.37 

50.87 

203.50 

63.59 

254.37 

.38 

52.25 

209.00 

65.31 

261.25 

.39 

53.62 

214.50 

67.03 

268.12 

.40 

55.(K) 

220.(X) 

68.75 

275.(X) 

.41 

56.37 

225.50 

70.46 

281.87 

.42 

57.75 

231.(K) 

72.18 

288.75 

.43 

59.12 

236.50 

73.90 

295.62 

.44 

60.50 

242.00 

75.62 

302.50 

.45 

61.87 

247.50 

77.34 

309.37 

.46 

63.25 

253.00 

79.06 

316.25 

.47 

64.62 

258.50 

80.78 

323.12 

.48 

66.00 

264.00 

82.50 

330.00 

.49 

67.37 

269.50 

84.21 

336.87 

.50 

68.75 

275.00 

85.93 

343.75 

.52 

71.50 

286.00 

89.37 

357.50 

.54 

74.25 

297.00 

92.81 

371.25 

.56 

77.00 

308.00 

96.25 

385.00 

.58 

79.75 

319.00 

99.68 

398.75 

.60 

82.50 

330.00 

103.12 
Clock    No. 

412.50 

participates 

in  Service  Bonus  as  per  this 

Chart,  starting 

with  Schedule 

Column .... 

commencine^ 

191... 

FERRACUTE  MACHINE  CO. 

Per... 

7 


bitp 


14 


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FEB  3    19.?i 


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MSH  0/34.Z 


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APR  151994 


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